Consider the Short-Run Supply Curve for a Perfectly Competitive Industry

question 23

Multiple Choice

Consider the short-run supply curve for a perfectly competitive industry.In general,which of the following statements are true?

• A)The short-run industry supply is obtained by horizontally summing the supply curves of all the individual firms in the industry.
• B)The industry supply curve tends to be flatter more elastic)than the horizontal sum of all the industrial firms' supply curves.
• C)Short-run supply for a perfectly competitive industry is flat for constant cost industries.
• D)both a and b
• E)none of the above are true in general

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Definitions:

Market Prices

Market Prices refer to the current price at which an asset or service can be bought or sold in a particular market.

Securities

Financial instruments that represent an ownership position in a publicly-traded corporation or a creditor relationship with a government or corporation.

Perpetuity

An annuity that pays a constant stream of cash flows indefinitely.

Duration

An indicator of how a bond or debt security's price is affected by interest rate fluctuations, usually stated in terms of years.