In Section 5.2 we introduced the supply curve, showing how many units the firm supplies
at different prices. From Figure 5.16 we may identify the short-run supply curve for
a firm in perfect competition as the marginal cost curve above the point where price
(AR) equals the minimum point of AVC (i.e. as price rises the firm equates MC to MR
and supplies the corresponding output). The industry supply curve would be the summation
of the marginal cost curves of all the firms in the industry.