Suppose there are four firms that are each willing to sell one unit of a good. Each firm has a different minimum price that they are willing to sell for: Firm A, $6; Firm B, $7; Firm C, $10; and Firm D, $12. If the market price is $11 then the market supply for this good will be
A) 4 units.
B) 1 unit.
C) 2 units.
D) 3 units.

Question

Quizplus · Accepted Answer

At a market price of $11, Firms A, B, and C would be willing to sell their goods because their minimum selling prices ($6, $7, and $10 respectively) are below or equal to the market price. Firm D, with a minimum price of $12, would not sell at this price.

Suppose There Are Four Firms That Are Each Willing to Sell