Figure 14-7
In the figure, 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.

-Refer to Figure 14-7.When 100 identical firms participate in this market,at what price will 15,000 units be supplied to this market

Question

Figure 14-7
In the figure, 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.
 
-Refer to Figure 14-7.When 100 identical firms participate in this market,at what price will 15,000 units be supplied to this market

Quizplus · Accepted Answer

To find the equilibrium price and quantity, we need to locate the intersection between the market supply and demand curves. In this case, we are given the market supply curve in panel (b), and we can assume that the market demand curve is a horizontal line at $1.50.

To find the quantity supplied at the equilibrium price of $1.50, we can trace a horizontal line from $1.50 on the y-axis to the market supply curve in panel (b) and then down to the x-axis. We see that approximately 15,000 units will be supplied at a price of $1.50 when there are 100 identical firms in the market. Therefore, the answer is C) $1.50.