In determining the supply curve of a perfectly competitive firm, what cost information do you need? Explain

The supply curve in a perfectly competitive market is the marginal cost curve.

In a perfectly competitive market, firms are price-takers, i.e., take market price as given. For any given market price, the firms then decide the optimal quantity of output to maximzie profit. Profit is maximized when the marginal revenue of the last unit produced is equal to the marginal cost. Since firms take market price as given, the price per unit of output is the same regardless of how many units a firm produces. Therefore, the marginal revenue is the same as the price of the output. Putting together, the optimal production occurs when marginal cost is equal to price.

To determine the supply curve, we need to identify the optimal level of output for a given price. Since we know that optimal level of output occurs when price is equal to marginal cost, we can trace the optimal output by intersecting the price and the marginal cost curve. In other words, the supply curve is the same as the marginal cost curve.