Due to the indivisibility of output,
A)market supply must be rougher than the individual firm's supply curve.
B)market supply can be smoother than the individual firm's supply curve.
C)an individual firm's supply curves cannot be summed.
D)it is impossible to obtain a valid market supply curve.
E)market supply is always equal to any individual firm's supply.

Question

Quizplus · Accepted Answer

The indivisibility of output means that a firm cannot easily adjust its level of output. As a result, the supply curve for a firm may be at a specific quantity and price, while the market supply curve is the sum of all individual firm's supply curves. Since each firm has its own specific supply curve, the market supply curve may be smoother than any individual firm's supply curve. Therefore, option B is the best choice.

Due to the Indivisibility of Output