Figure 9-12 shows three possible long-run supply curves for an industry that is currently in equilibrium with price (P*) and quantity (Q*). Which of the following statements is correct?
a.
The long-run supply curve would be F for a decreasing-cost industry, H for an increasing-cost industry, and G for a constant-cost industry.
b.
All three long-run supply curves indicate that the firms' LRATC curves shift as industry output expands.
c.
If the industry uses a significant portion of a scarce input, the long-run supply curve would likely be curve H.
d.
An industry that moves along long-run supply curve F earns above-normal profits in the long run.
e.
If an increase in market output leads to lower prices for a key input, the long-run supply curve would likely be curve H.
e
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a) Of concerns about equity. b) People do not want public goods as much as private goods. c) The government is mandated to produce public goods. d) People are less willing to pay for public goods than for private goods.