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Therefore, every firm has the same costs'.no one has a special technological or cost advantage). In this function, q is the amount of output by the individual firm. That means that the marginal cost (or MC) function is MC = 10 + 2q.
There are 100 firms in this industry. As we remember from first year, the marginal cost curve of the individual firm tells us how much that firm will be willing to supply at different possible prices. If the firm faces a price that is below its AVC, it would prefer to temporarily shut down, rather than not even be able to cover its variable costs with revenue. But apart from this qualification, the MC curve is the supply curve of the individual firm (it tells us how much the firm will supply at different prices it might face)...
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