Aggregating Firm Supplies for Market Supply

Steps:

• Identify the competitive market structure where many firms produce identical products.
• Determine each firm's supply curve based on marginal cost above average variable cost.
• Sum the quantities supplied by all firms at each price level horizontally.
• Construct the market supply curve from this horizontal summation.

Why A is correct:

• In competitive markets, market supply is the horizontal sum of all individual firms' supply curves, as defined by microeconomic theory.

Why the others are wrong:

• B: Focuses only on one firm, ignoring total market output.
• C: Identical to B, insufficient for aggregate supply.
• D: Overemphasizes a single dominant firm, not applicable in perfect competition.

Final answer: A