Quote:
Originally Posted by pdurrant
That's a rather odd supply curve. Surely the price-per-product should decrease, not increase, with quantity sold, as the fixed costs get spread across a greater number of the product.
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That supply curve is not odd, that is a normal supply curve. You're confusing supply curve (supply and demand analysis) with economies of scale.
A supply and demand analysis is a partial equilibrium analysis, that is ceteris paribus (as I have stated) meaning all other things held constant. It does not take into account the product average cost which is what you're suggesting.