Question

Consider the long run in a competitive industry in which all firms have the same marginal cost function:

??(?)=2?

where ? stands for the amount of output produced.

Part 1

Suppose the market price for the good equals $19 per unit. If there are currently 8 firms in the industry, they will supply a total of _______________   units of output.

Part 2

Suppose the price was actually one dollar higher (so $20 instead of $19). The total amount of output produced by the industry would be ________________ units.

Part 3

Return to the original price ($19), but assume that there are currently 24 firms in the industry. The output produced by the industry would be ______________    units.

Part 4

Suppose the price was actually one dollar higher (so $20 instead of $19), but assume that there are currently 24 firms in the industry. The total amount of output produced by the industry would be __________________    units.

Part 5

Considering the questions in Parts 1 through 4, the more firms there are in the industry, the flatter the industry supply curve would be.

Answer:

A. true

B. false

Answer 1