Question

How is the market supply curve derived from the supply curves of individual producers?.

Answer 1

The way that the market supply curve is derived from the supply curves of individual producers is by horizontally adding the individual supply curves.

How is the market supply curve estimated?

The market supply curve is estimated by adding up all the individual supply curves in the market. This therefore shows the total amount os supply for a good or service in the market.

The way that this addition is done is by horizontally adding the supply curves. What this means is that the quantities that are being offered by each individual suppliers at the various prices in the market, are added up to come up with the market supply curve.

Options for this question are:

• a. finding the average price at which sellers are willing and able to sell a particular quantity of the good.
• b. vertically summing individual supply curves.
• c. finding the average quantity supplied by sellers at each possible price.
• d. horizontally summing individual supply curves.

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