The Strategic Industry Supply Curve

In this paper, we develop the concept of the strategic industry supply curve, representing the locus of Nash equilibrium outputs and prices arising from additive shocks to demand. We show that the standard analysis of partial equilibrium under perfect competition, including the graphical representation of supply and demand, due to Marshall, can be extended to encompass im- perfectly competitive markets. Our approach permits a unified treatment of monopoly, oligopoly and competition in linear supply schedules. Further, our model satisfies the five principles of incidence set out by Weyl and Fabinger (2013).