Asked by riq
Which of the following is true about the market supply curve for a good?
It is derived from the summation of the marginal revenue product of labor hired by individual firms.
a
It is derived from the summation of the marginal product of labor hired by individual firms.
b
It is derived from the summation of individual firms’ quantity supplied at each price.
c
It lies above the market demand curve at quantities less than the market equilibrium quantity.
d
It lies below the market demand curve at quantities greater than the market equilibrium quantity.
All Answers 1
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Correct answer: c.
Reason: The market supply curve is the horizontal sum of individual firms' supply curves — equivalently, the sum of the quantities each firm would supply at each price. Options a and b confuse goods supply with labor-demand concepts (marginal revenue product / marginal product of labor), and d is incorrect about the relative positions of supply and demand beyond equilibrium.
Reason: The market supply curve is the horizontal sum of individual firms' supply curves — equivalently, the sum of the quantities each firm would supply at each price. Options a and b confuse goods supply with labor-demand concepts (marginal revenue product / marginal product of labor), and d is incorrect about the relative positions of supply and demand beyond equilibrium.
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