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An Industry Has 1000 Competitive Firms, Each Producing 50 Tons

Question 117

Multiple Choice

An industry has 1000 competitive firms, each producing 50 tons of output. At the current market price of $10, half of the firms have a short-run supply curve with a slope of 1; the other half each have a short-run supply curve with slope 2. The short-run elasticity of market supply is:


A) 1/50.
B) 3/10.
C) 1/5.
D) 2/5.
E) none of the above

Correct Answer:

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