Figure 14-4
In the following figure, graph (a) depicts the linear marginal cost (MC) of a firm in a competitive market, and graph (b) depicts the linear market supply curve for a market with a fixed number of identical firms.

-Refer to Figure 14-4. If there are 100 identical firms in this market, what is the value of Q₂?

Question

Figure 14-4
In the following figure, graph (a) depicts the linear marginal cost (MC) of a firm in a competitive market, and graph (b) depicts the linear market supply curve for a market with a fixed number of identical firms.

Figure 14-4 In the following figure, graph (a) depicts the linear marginal cost (MC) of a firm in a competitive market, and graph (b) depicts the linear market supply curve for a market with a fixed number of identical firms. -Refer to Figure 14-4. If there are 100 identical firms in this market, what is the value of Q<sub>2</sub>? A) 10,000 B) 20,000 C) 40,000 D) 80,000

-Refer to Figure 14-4. If there are 100 identical firms in this market, what is the value of Q₂?

Quizplus · Accepted Answer

Q₂ represents the quantity supplied by all firms at price P1. If each of the 100 identical firms supplies 200 units at P1 (as indicated by the distance from QS1 to U1 and from B1 to S1, which is 200 units per firm), the total market supply at P1 is 100 firms * 200 units/firm = 20,000 units.