Use the following diagram depicting a dominant firm market to answer the following questions:

-In equilibrium, how many units will the fringe producers supply?
A) 45 units
B) 60 units
C) 90 units
D) 135 units

Question

Use the following diagram depicting a dominant firm market to answer the following questions:

-In equilibrium, how many units will the fringe producers supply?
A) 45 units 
B) 60 units 
C) 90 units 
D) 135 units

Quizplus · Accepted Answer

In equilibrium, the fringe producers will supply the quantity where the marginal cost equals the price. The marginal cost for the fringe producers is $45, and the price is $60. Therefore, the fringe producers will supply 45 units.

Use the Following Diagram Depicting a Dominant Firm Market to Answer