The short-run market supply curve isQuestion 3Select one:a.the vertical summation of each firm's short-run supply curve.b.the horizontal summation of each firm's short-run supply curve.c.the horizontal summation of each firm's short-run average cost curve.d.the vertical summation of each firm's short-run average cost curve.Clear my choice
Question
The short-run market supply curve isQuestion 3Select one:a.the vertical summation of each firm's short-run supply curve.b.the horizontal summation of each firm's short-run supply curve.c.the horizontal summation of each firm's short-run average cost curve.d.the vertical summation of each firm's short-run average cost curve.Clear my choice
Solution
The correct answer is b. the horizontal summation of each firm's short-run supply curve.
Here's why:
In the short run, each firm in a perfectly competitive market has its own supply curve, which shows the quantity of output that the firm is willing to produce at each price.
To find the market supply curve, we add up the quantities that all firms in the market are willing to produce at each price. This is done by horizontally sum
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