Which Statement Is True of the Market Supply Curve

question 35

Multiple Choice

Which statement is true of the market supply curve?

• A)It is the vertical summation of all the individual supply curves.
• B)It is the horizontal summation of the upward sloping portion of the AVC function of all firms in the industry.
• C)One must know the marginal cost information of firms in order to construct a supply function.
• D)In perfect competition the slope of the curve is horizontal.

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Definitions:

Monopolies

Market situations in which a single supplier dominates the supply of a good or service, with no close substitutes.

Demand Curve

An illustrated chart depicting the correlation between a product's price and the amount of it consumers want to buy at that price level.

Marginal Cost

The spending necessary to produce an extra unit of a product or service.

Intellectual Property

Legal rights that result from intellectual activity in the industrial, scientific, literary, and artistic fields.