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-(Table: Cherry Farm)Use Table: Cherry Farm.Suppose there are 100 farms in this industry with identical cost curves,as shown in the table.Which point would fall on the industry short-run supply curve?

Question

Use the following to answer question: 
-(Table: Cherry Farm)Use Table: Cherry Farm.Suppose there are 100 farms in this industry with identical cost curves,as shown in the table.Which point would fall on the industry short-run supply curve?

Quizplus · Accepted Answer

The industry short-run supply curve is the horizontal summation of the individual firm supply curves. At a market price of $1.50 per pound, each firm will produce the quantity where marginal cost equals price. In this case, that is at a quantity of 8,600 pounds, which is the output level at which the marginal cost is $1.50. Thus, D is the correct choice.

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