Suppose There Are 50 Firms in a Perfectly Competitive Market

question 27

Multiple Choice

Suppose there are 50 firms in a perfectly competitive market and each maximizes profit at 50 units of output when market price is $15.00 per unit. One of the points on the market supply curve must be at:

• A) Price = $15 and Quantity supplied = 2,500.
• B) Price = $15 and Quantity supplied = 25,000.
• C) Price = $3.33 and Quantity supplied = 2,500.
• D) Price = $3.33 and Quantity supplied = 25,000.

---

Definitions:

Price Ratio

The proportional relationship between two or more prices, indicating the relative cost of goods or services.

Income

The amount of money or equivalent value received by an individual or entity in return for labor or services provided, from investments, or from other sources.

Net Demand

The difference between the total demand for a product or service and the total supply of it in the market.

Endowment

In economics, the total resources available to an individual or entity, including assets, income, and inherited resources.