Figure 14-11
-Refer to Figure 14-11. The figure above is for a firm operating in a competitive industry. If there were eight identical firms in the industry, which of the following price-quantity combinations would be on the market supply curve?

Question

Figure 14-11 
-Refer to Figure 14-11. The figure above is for a firm operating in a competitive industry. If there were eight identical firms in the industry, which of the following price-quantity combinations would be on the market supply curve?

Quizplus · Accepted Answer

In a perfectly competitive industry with eight identical firms, the market supply curve is the horizontal summation of the individual supply curves of each firm. In this case, the individual supply curve for each firm is the same as the marginal cost curve, which intersects the average variable cost curve at its minimum point. This occurs at point B and point D in the diagram. So, the price-quantity combinations on the market supply curve would be B and D only.

Figure 14-11 -Refer to Figure 14-11. the Figure Above Is for a Is