The Short-Run Industry Supply Curve Is Found by

question 172

Multiple Choice

The short-run industry supply curve is found by

• A) taking the inverse of the industry demand curve.
• B) horizontally summing the average total cost curve of all firms in the industry.
• C) adding up the quantities supplied at each price by each firm in the industry.
• D) adding up the quantities supplied at each price by each of the firms in the industry that are making a profit.

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Definitions:

Deadweight Loss

Deadweight loss occurs when an economy's total welfare is not maximized, resulting from inefficiencies such as taxes or subsidies that distort market equilibrium.

Pure-monopoly Market

A market structure where a single firm has the exclusive control over the supply of a product or service, with no close substitutes available, allowing for price setting.

X-inefficiency

The difference between actual and minimum possible input costs, often occurring due to a lack of competitive pressure and inefficiencies in production.

Minimum Possible Average Cost

The lowest average cost at which a firm can produce its output in the long run, given its technology and factor prices.