Answer to Question #133482 in Microeconomics for Shaiku jagitay

Question

How to derive individual and market supply functions from cost function

Answer 1

The first derivative of the cost function is the inverse individual supply function. Then rearrange this equation to find Q and get the direct cost function. Market supply function is the sum of all individual supply functions. As far as all the firms on the competitive market have the same costs, then market supply Qs=qs×m, where qs is an individual supply, m is the quantity of firms on the market.