"Because a firm's supply curve slopes upward, the long-run supply curve of an industry must also slope upward." Do you agree or disagree? Explain
What will be an ideal response?
Disagree. Even though a firm's supply curve slopes upward, the slope of the industry supply curve in the long run can be positive, negative or horizontal. An upward sloping industry supply curve reflects that an increase in industry output is accompanied by an increase in long-run average costs, while a downward sloping industry supply curve reflects a corresponding decrease in long-run average costs, and a horizontal industry supply curve reflects no change in long-run average costs.
You might also like to view...
Discouraged workers who want jobs but have stopped looking for jobs are:
A. frictionally unemployed. B. unemployed due to structural unemployment. C. no longer in the labour force. D. helped by minimum-wage legislation.
The average nonagricultural tariff in the U.S. is about
A) 3 percent. B) 5 percent. C) 9 percent. D) 15 percent.
Oligopolistic industries are characterized by a
A) few large firms and no barriers to entry. B) large number of firms and no barriers to entry. C) few large firms and substantial barriers to entry. D) large number of firms and substantial barriers to entry.
Economists use what term to describe the want-satisfying power of a good?
A) demand B) utility C) marginal propensity to consume D) income elasticity