A Perfectly Competitive Industry Has 100 High-Cost Producers, Each with a Short-Run

question 71

Multiple Choice

A perfectly competitive industry has 100 high-cost producers, each with a short-run supply curve given by Q_H = 16P, and 100 low-cost producers, each with a short-run supply curve given by Q_L = 24P.
The industry demand curve is given by Q^d = 100,000 - 1,000P. At market equilibrium, industry producer surplus is:

• A) $800,000.
• B) $20,000.
• C) $4,000.
• D) $1.2 million.

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Definitions:

Special Journals

Accounting books used to categorize and record specific types of transactions such as sales, purchases, cash receipts, and cash disbursements, streamlining the accounting process.

Record and Post

The process of recording transactions in the journals and subsequently posting them to the ledger accounts.

Special Journals

Accounting journals designed for the repeated recording of specific types of transactions, such as sales or purchases, to streamline the accounting process.

Cash

A form of liquid asset that represents the currency that a business or individual can immediately access and use for transactions.