The supply curve is $p = 0.1 q - 10$ . The cost of production at the efficient scale is Rs 10. How many units would the firm supply at a market price of Rs 15?

0 units

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125 units

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250 units

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500 units

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Solution

The correct option is C
250 units

Price = Rs 15
Minimum value of SAC = Rs 10

Since P > SAC >AVC, the firm would produce at a market price of Rs 15.

Substituting p=15 in the equation, we get
$15 = 0.1 q - 10 q = \frac{25}{0.1} = 250$

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The supply curve is p=0.1q−10 . The cost of production at the efficient scale is Rs 10. How many units would the firm supply at a market price of Rs 15?

The correct option is C 250 units Price = Rs 15 Minimum value of SAC = Rs 10 Since P > SAC >AVC, the firm would produce at a market price of Rs 15. Substituting p=15 in the equation, we get 15=0.1q−10q=250.1=250

The supply curve is $p = 0.1 q - 10$ . The cost of production at the efficient scale is Rs 10. How many units would the firm supply at a market price of Rs 15?

The correct option is C
250 units

Price = Rs 15
Minimum value of SAC = Rs 10

Since P > SAC >AVC, the firm would produce at a market price of Rs 15.

Substituting p=15 in the equation, we get
$15 = 0.1 q - 10 q = \frac{25}{0.1} = 250$