Suppose the following information is known about a market:
1. Sellers will not sell at all below a price of $2.
2. At a price of $10, any given seller will sell 10 units.
3. There are 100 identical sellers in the market.
Assuming a linear supply curve, use this information to derive the market supply curve.
First, Q = 100q since all firms are identical. This gives two points: (p = 2, Q = 0 ) and
(p = 10, Q = 1000 ). From the first point, it is known that p = 2 + bQ. When Q = 1000, 10 = 2 + b(1000 ). Solving for b yields b = .008. Rearranging to solve for Q yields: Q = -250 + 125p or P= 2 + .008Q.
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The Second Bank of the United States
A) was disbanded in 1811 when its charter was not renewed. B) had its charter renewal vetoed in 1832. C) is considered to be the primary cause of the bank panic of 1907. D) None of the above.
Answer the question on the basis of the following information: Suppose a firm hires both labor (L) and capital (C) under purely competitive conditions. The price of labor is P L and that of capital is P C . The marginal product of labor is MP L and that
of capital is MP C . The firm sells its product competitively at a price of P X . Refer to the given information. If MP C /P C > MP L /P L , the firm: A. may be maximizing profits, but it is not minimizing costs. B. may be minimizing costs, but it is not maximizing profits. C. is neither minimizing costs nor maximizing profits. D. is minimizing costs and maximizing profits.