The figure below shows the supply curves for gasoline for two oil companies (MaxOil and MagnusPetro). It would be useful to find the equations of the two supply curves to answer the questions below.

-Refer to the figure above.Suppose that MaxOil and MagnusPetro merged and became a single company,Empoleum.Then,all else being equal,the ________.

Question

The figure below shows the supply curves for gasoline for two oil companies (MaxOil and MagnusPetro). It would be useful to find the equations of the two supply curves to answer the questions below.
 
-Refer to the figure above.Suppose that MaxOil and MagnusPetro merged and became a single company,Empoleum.Then,all else being equal,the ________.

Quizplus · Accepted Answer

Since the merger would not change the production capacities of the two companies or their costs, the total supply curve would be the horizontal sum of the individual supply curves of MaxOil and MagnusPetro, resulting in a total supply curve that is identical to the sum of the two individual supply curves. Therefore, the total supply curve will not shift leftward or rightward, and the quantity supplied at each price will be the same as the sum of the individual quantities supplied by MaxOil and MagnusPetro. Option D is not a reasonable outcome, as doubling the quantity supplied at each price would require a significant increase in production capacity, which is not feasible immediately after a merger.

The Figure Below Shows the Supply Curves for Gasoline for Two