Graph 14-6
In this graph, panel (a) depicts the linear marginal cost of a firm in a competitive market, and panel (b) depicts the linear market supply curve for a market with a fixed number of identical firms. Use the graph to answer the following question(s).
-Refer to Graph 14-6. If at a market price of $1.50, 18 750 units of output are supplied to this market, how many identical firms are participating in this market?

Question

Graph 14-6
  In this graph, panel (a) depicts the linear marginal cost of a firm in a competitive market, and panel (b) depicts the linear market supply curve for a market with a fixed number of identical firms. Use the graph to answer the following question(s).
-Refer to Graph 14-6. If at a market price of $1.50, 18 750 units of output are supplied to this market, how many identical firms are participating in this market?

Quizplus · Accepted Answer

To determine the number of identical firms, divide the total market supply (18,750 units) by the output supplied by each firm at the market price of $1.50. If each firm supplies 150 units at this price, then 18,750 / 150 = 125 firms are participating.