In a perfectly competitive market, the market supply curve is a. always a horizontal line. b. the vertical sum of all the individual firms' supply curves. c. the horizontal sum of all the individual firms' supply curves. d. the marginal cost curve above average total cost for a representative firm

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Business

Daniella Bentley

27 September, 14:30

In a perfectly competitive market, the market supply curve is a. always a horizontal line. b. the vertical sum of all the individual firms' supply curves. c. the horizontal sum of all the individual firms' supply curves. d. the marginal cost curve above average total cost for a representative firm

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Weston · Answer 1

Answer: C.) Horizontal sum of all the individual firm's supply curve

Explanation: A perfectly competitive market, is that in which sellers or suppliers of a certain product are numerous such that a slight increase in price, and demand could fall to 0. Here, an individual seller has no control over the price of commodities. The supply curve tells how much quantity will be produced at different prices. Therefore the market supply curve is determined by all individual sellers individual price in other to determine the overall quantity to be produced at varying market price. Prices are drawn horizontally from the y-axis to determine quantity produced at different prices for each indivudual seller which is summed to generate the market supply curve.