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Basic Question 5 of 10
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 ______.
B. price = $15 and quantity supplied = 25,000
C. price = $3.33 and quantity supplied = 2,500
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
User Contributed Comments 3
| User | Comment |
|---|---|
| vatsal92 | Also, the price would remain constant. Hence, you can eliminate your choice to A or B and then go for the multiplication of firms' output. |
| fzhou | According to the question, each firm maximizes its profit by producing 50 units, and there're 50 firms in the market, so total output = 50 X 50 =2,500 units. Given that the price of each firm is $15, so the point that MUST be on the curve is $15, 2,500 units. |
| khalifa92 | such profoundness and mysteriousness. |
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Learning Outcome Statements
describe characteristics of perfect competition, monopolistic competition, oligopoly, and pure monopoly
CFA® 2024 Level I Curriculum, Volume 1, Module 1.