Intermediate Microeconomics and Its Application 12th Edition by Walter Nicholson,Christopher Snyder

Exercise 22

Why do economists believe short-run marginal cost curves have positive slopes? Why does this belief lead to the notion that short-run supply curves have positive slopes? What kind of signal does a higher price send to a firm with increasing marginal costs? Would a reduction in output ever be the profit-maximizing response to an increase in price for a price-taking firm?