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.If at a market price of $2.50,62,500 units of output are supplied to this market.How many identical firms are participating in 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.If at a market price of $2.50,62,500 units of output are supplied to this market.How many identical firms are participating in this market

Quizplus · Accepted Answer

At a market price of $2.50, the market quantity supplied is 62,500 units. From panel (b), we can see that the market supply curve intersects the marginal cost curve at a quantity of 250 units. Therefore, there are 250 identical firms participating in this market.