Question: Here are some drills for you on finding market supply functions from linear firm supply functions. The trick here is to remember that the market

Here are some drills for you on finding market supply functions from linear firm supply functions. The trick here is to remember that the market supply function may have kinks in it. For example, if the firm supply functions are s1(p) = p and s2(p) = p − 2, then the market supply function is S(p) = p for p ≤ 2 and S(p) = 2p − 2 for p > 2; that is, only the first firm supplies a positive output at prices below $2, and both firms supply output at prices above $2. Now try to construct the market supply function in each of the following cases.
(a) s1(p) = p, s2(p) = 2p, s3(p) = 3p.
(b) s1(p) = 2p, s2(p) = p−1.
(c) 200 firms each have a supply function s1(p) = 2p − 8 and 100 firms each have a supply function s2(p) = p − 3.
(d) s1(p) = 3p−12, s2(p) = 2p−8, s3(p) = p−4.

Step by Step Solution

3.42 Rating (158 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

a s 1 p p s 2 p 2p s 3 p 3p Sp 6p b ... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Document Format (1 attachment)

Word file Icon

649-B-E-D-S (1130).docx

120 KBs Word File

Students Have Also Explored These Related Economics Questions!