Question

Q9 The slope of supply curve measures: the change in quantity supplied with respect to an...

Q9 The slope of supply curve measures: the change in quantity supplied with respect to an incremental change in price of the product

a) True

b) False

10. The market supply function and an individual firm's supply function are expected to have same slope when there are many firms producing the same product

a) True

b) False

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Answer #1

9.False, because supply curve shows change in quantity supplied with respect to change in price of the product  not incremental change in price of the product.

Law of supply states that there is positive relation between price and quantity supplied of the product. If price of product rises, quantity supplied will also rise and if price of product falls , quantity supplied will also fall.

10. False, if large number of firms are producing same goods then this is the case of perfect competition market.

In perfect competition market , market supply curve is upward sloping and firm supply curve is horizontal to the x- axis.

Market will be supplying more at higher price and supplying less at lower prices, firm will be supplying any quantity at a fixed price because firm are the price taker and market is price marker in perfect competition.

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