Why is the supply curve upward sloping because of marginal cost?

The
fundamental point with the supply curve is that the marginal cost must be equal to marginal
revenue. At that location, there is economic equilibrium because you will not be wasting revenue
nor incurring extra marginal cost. Because of this, marginal cost and marginal revenue are
intrinsically linked; therefore, the slope of the supply curve will move accordingly.

As supply increases, you will produce more. Initially, below equilibrium, the marginal
cost will decrease with each piece produced. However, at the point where firms produce, the
marginal cost increases for every product. At this point, marginal revenue increases as well,
but slower. The point where the two cross is equilibrium, and it is at this point where you will
want to produce.

The curve increases because, once you have produced a
certain amount, it is not as valuable to continue to produce above thatso the marginal cost
increases for each piece produced. To counter this, firms will raise prices if there is
sufficient demand.