Asked by Raman Hundal on Jun 13, 2024
Verified
The long-run supply curve in a constant-cost industry is linear and:
A) upward-sloping.
B) downward-sloping.
C) horizontal.
D) vertical.
E) could have any constant slope.
Long-Run Supply Curve
A graphical representation showing the relationship between price and quantity supplied over time, factoring in adjustments in factors of production.
Constant-Cost Industry
Industry whose long-run supply curve is horizontal.
- Identify and explain the differences among constant-cost, increasing-cost, and decreasing-cost industries and their impact on market equilibrium.
Verified Answer
KF
Kiara FarrellJun 15, 2024
Final Answer :
C
Explanation :
In a constant-cost industry, the long-run supply curve is horizontal as increases in demand do not affect the cost of production for firms. Therefore, they can increase output without facing higher costs, resulting in a flat and constant supply curve.
Learning Objectives
- Identify and explain the differences among constant-cost, increasing-cost, and decreasing-cost industries and their impact on market equilibrium.