Question

Suppose the long-run supply curve for a good is upward-sloping. The upward slope could be explained byA. a breakdown of the "free entry and exit" feature of competition.B. the fact that a resource used in the production of the good is available only in limited quantities.C. a breakdown of the "price taking" feature of competition.D. decreases in production costs resulting from more firms coming into the market.

Answer 1

The fact that a resource used in the production of the good is available only in limited quantities.

Answer: Option B.

Explanation:

The long run supply curve in an industry in which development doesn't change input costs (a steady cost industry) is a horizontal line. The since quite a while ago run supply bend for an industry in which creation costs increment as yield rises (an expanding cost industry) is upward inclining.

In the long run aggregate supply curve is consummately vertical, mirroring financial analysts' conviction that adjustments in total interest just purpose a transitory change in an economy's absolute yield. The since a long time ago run total stockpile bend can be moved, when the elements of creation change in amount.