The market supply curve is found by
A) surveys of consumer groups.
B) vertically summing up the equilibrium prices of individual firms.
C) horizontally summing up the supply curves of individual firms.
D) estimating what the supply curve would be of one huge firm large enough to serve the entire market.
Answer: C
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The marginal propensity to consume (MPC)
A) shows the percentage of real disposable income consumed at each level of income. B) shows how much of an extra dollar of real disposable income is spent. C) shows how much real disposable income changes when consumption falls. D) is greater than 1 only if the marginal propensity to save is greater than 1.
In the above figure, what is the efficient quantity of hot dogs to produce?
A) 2 thousand per day B) 4 thousand per day C) 6 thousand per day D) The efficient quantity cannot be determined without knowing the PPF for this economy.
Suppose cookie sales fall as consumers become more carbohydrate-conscious. If the cookie industry is a constant-cost, perfectly competitive industry, this decline in market demand will cause market supply to:
A. increase in the long run until the equilibrium price is again equal to minimum average total cost. B. increase in the long run, resulting in a higher equilibrium price. C. decrease in the long run until the equilibrium price is again equal to minimum average total cost. D. decrease in the long run, resulting in a lower equilibrium price.
If a tax on 5 cents a tomato lowers the price received by tomato sellers by 5 cents a tomato , then the supply of tomatoes is perfectly ___ and the seller pays ____
A) inelastic; all B) elastic; all C) inelastic; some of D) inelastic; none of E) elastic; none of