In the short run for a particular market, there are 5,000 firms. Each firm has a marginal cost of $7 when it produces 200 units of output. One point on the market supply curve is
A)quantity = 5,000; price = $7.
B)quantity = 35,000 price = $35,000.
C)quantity = 1,000,000, price = $7.
D)quantity = 1,000,000, price = $35,000.

Question

Quizplus · Accepted Answer

The market supply curve is the horizontal sum of all individual firms' supply curves. If each firm produces 200 units at a marginal cost of $7, then 5,000 firms collectively produce 1,000,000 units at a price of $7.

In the Short Run for a Particular Market, There Are