Consider the following figure that shows a competitive firm on the left panel and a competitive market on the right panel. Assuming all the firms in the market are identical, there are _____ firms in this industry.
Figure 8.8

Question

Consider the following figure that shows a competitive firm on the left panel and a competitive market on the right panel. Assuming all the firms in the market are identical, there are _____ firms in this industry. ​
Figure 8.8
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Quizplus · Accepted Answer

Since the firm in the left panel is identical to all the other firms in the market, the total number of firms can be calculated by dividing the total market supply by the quantity supplied by a single firm. In the right panel, the market supply at a price of $10 is 2,000 units. If the quantity supplied by a single firm is 40 units (as shown in the left panel), then the total number of firms in the market is 2,000/40 = 50. Therefore, the answer is D.

Consider the Following Figure That Shows a Competitive Firm on the Left