Solutions? 26. In a competitive market, the market supply curve can be derived f

Question

Solutions? 26. In a competitive market, the market supply curve can be derived frons the irms supply curves by (a) Summing the firm supply eurves horizontally. (b) Summing the firm supply curves vertically. (c) Focusing on any one firm's supply curve. (d) Pocusing on the most efficient firm's supply curve 27. In general, the profit-maximizing rule MR MC is (a) followed by a monopolist, but not by a perfectly competitive Srm (b) followed by a perfectly competitive firm bat not by a unomopolist (c) followed by all types of finns. (d) not followed by any firms, because it would reduce economic profit to aero

Explanation / Answer

26) The correct choice is a

Explanation : - The market supply curve for a good in a perfectly competitive market is obtained by adding horizontally the supply curves of all the individual producers of that good.

27) The correct choice is C

Explanation : - Total profit is maximized when marginal revenue is equal to marginal cost. This rule applies to all firms, whether they operate in perfectly competitive markets, monopolistic markets, oligopolistic markets or monopolistically competitive markets.

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