At the price of $5 per pack of batteries, Duracell sells 10,000 packs of batteries and Energizer sells 15,000 packs of batteries. When the price rises to $7.50, Duracell sells 12,000 packs of batteries and Energizer sells 16,000 packs of batteries. What is the market supply at $7.50? Question 11 options: A. 12,000 B. 16,000 C. 4,000 D. 28,000 E. 25,000

D. 28000

Explanation:

Lets first understand what market supply is? Market supply is the accumulation/aggregation of total supply made by individual suppliers/vendors who are willing to provide at the current/prevailing prices. The market supply basically reflects the willingness of the vendors to supply goods/services at a given rate. Market supply can be either expressed in monetary terms or in terms of quantity.

So the market supply at $7.50 is as follows:

Market supply @ $7.50 = 12000 + 16000

Market supply @ $7.50 = 28000

It can be generally agreed that an increase in price can lead to an increase in supply by vendors, owing to the fact that the suppliers find a greater margin for themselves. Now in this question, we can see that at the price of $5 per pack of battery Duracell and Energizer sell 10000 and 15000 packs respectively and when the price rises to $7.50 both Duracells and Energizer sell more than what they were selling at $5 per pack.