Figure: Increasing Costs Refer to the figure. If an industry consists of two firms, Firm 1 and Firm 2, as shown in the diagram, what is the industry's quantity supplied at a price of $7 and $9?
A) 0 and 5 units, respectively
B) 4 and 5 units, respectively
C) 8 and 10 units, respectively
D) 4 and 10 units, respectively

Question

Figure: Increasing Costs  Refer to the figure. If an industry consists of two firms, Firm 1 and Firm 2, as shown in the diagram, what is the industry's quantity supplied at a price of $7 and $9?
A) 0 and 5 units, respectively 
B) 4 and 5 units, respectively 
C) 8 and 10 units, respectively 
D) 4 and 10 units, respectively

Quizplus · Accepted Answer

At a price of $7, Firm 1 will produce 4 units, and Firm 2 will produce 0 units due to the increasing costs. So, the industry's quantity supplied will be 4 units. 
At a price of $9, Firm 1 will produce 4 units, and Firm 2 will produce 6 units, which sum up to 10 units. So, the industry's quantity supplied will be 10 units.

Figure: Increasing Costs Refer to the Figure