In the short run, a change in the market price induces the profit-maximizing firm to change its optimal level of output. This optimal output occurs when price is equal to marginal cost, as long as marginal cost exceeds average variable cost. Therefore, the supply curve of the firm is its marginal cost curve, above average variable cost. (When the price falls below average variable cost, the firm will shut down.)
In the long run, the firm adjusts its inputs so that its long-run marginal cost is equal to the market price. At this level of output, it is operating on a short-run marginal cost curve where short-run marginal cost is equal to price. As the long-run price changes, the firm gradually changes its mix of inputs to minimize cost. Thus, the long-run supply response is this adjustment from one set of short-run marginal cost
where is this question in the book, can you show me?i have a chinese answer to the book written by a student but i do not have the original edition of english. can you mail to me? thanks a lot.