How is the market supply curve in a perfectly competitive market derived?

In a perfectly competitive market, the market supply curve is derived by horizontally summing the individual firms' supply curves. Each firm in a perfectly competitive market produces a quantity of output based on the price they can sell it for, as each individual firm's supply curve reflects the relationship between price and quantity supplied for that firm.

To derive the overall market supply curve, you take the quantities supplied by each firm at various price levels and add them together. This means that for a given price, you add up all the quantities that each firm is willing to supply. Because each firm is a price taker, the decision made by one firm does not affect the market price; therefore, the total quantity supplied in the market at any given price is simply the sum of the quantities supplied by all individual firms.

This method of horizontal summation reflects the behavior of individual firms in response to market prices and allows for an accurate representation of total market supply. Such an approach captures the essence of competition in the market and provides insights into how prices and quantities are determined in a perfectly competitive environment.