Short-Run Market Supply Assumptions

Steps:

• Market supply curve is the horizontal summation of individual firms' supply curves at each price.
• Aggregation assumes fixed short-run conditions: number of firms, factor prices, and technology.
• Individual supply curves show quantity supplied varying with product price.
• Thus, price changes along the supply curve during aggregation.

Why B is correct:

• The supply curve, by definition, plots quantity against varying product price (independent variable), so price is not held constant.

Why the others are wrong:

• A: Number of firms is fixed in the short run, allowing simple summation.
• C: Factor prices are fixed in the short run, not varying with output.
• D: Technology is fixed in the short run, unchanged across firms.

Final answer: B