Question

How can we derive the market supply schedule from the supply schedules of an individual firm?

• A. Value of supply schedule of all individual firms
• B. Difference between the supply schedule of all individual firms
• C. Vertical summation of the supply schedule of all individual firms
• D. Horizontal summation of the supply schedule of all individual firms

Answer 1

The correct option is D

Horizontal summation of the supply schedule of all individual firms

Market supply schedule refers to the supply schedule of all the firms in the market producing a particular commodity. Hence, the horizontal summation of the supply schedule of all individual firms gives us the market supply schedule.