The short-run industry supply curve is found by
A) taking the inverse of the industry demand curve.
B) horizontally summing the average total cost curve of all firms in the industry.
C) adding up the quantities supplied at each price by each firm in the industry.
D) adding up the quantities supplied at each price by each of the firms in the industry that are making a profit.
C
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Peter's Pencils is a perfectly competitive company producing pencils. Suppose Peter is producing 1,000 pencils an hour. If the total cost of 1,000 pencils is $500, the market price per pencil is $2, and the marginal cost is $2, then Peter
A) makes an economic profit because marginal revenue is equal to marginal cost at this output level. B) should decrease his output to increase his profit. C) is maximizing his profit and is making an economic profit. D) should increase his output to increase his profit. E) is not maximizing his profit but is making zero economic profit anyway.
Suppose a recession surprises economic forecasters who did not see it coming. This is an example of a _____
a. cyclical lag b. recognition lag c. decision-making lag d. implementation lag e. effectiveness lag
Spending VCU4 on real-world goods and services causes the nation's:
a. Demand for real goods and services to rise and monetary base to remain the same. b. Demand for real goods and services to remain the same and M2 money supply to fall. c. Demand for real goods and services to rise and M2 money multiplier to fall. d. Demand for real goods and services to rise and M2 money supply to rise.
If labor and capital are underemployed, then an increase in government spending:
A. would have no impact on GDP. B. would increase GDP by exactly the increase in government spending. C. would increase GDP by more than the increase in government spending. D. would increase GDP by less than the increase in government spending