"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.
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If planned aggregate expenditure is less than real GDP, some firms will experience unplanned increases in inventories
Indicate whether the statement is true or false
Economic theory suggests that the standard of living of American workers would fall if the
a. United States had more natural resources. b. knowledge and skills of workers improved, reducing the need for workers. c. productivity of American workers declined. d. United States turned to more automated methods of production.
Which of the following is responsible for buying and selling government securities to influence reserves in the banking system?
A. Twelve Federal Reserve banks. B. The Board of Governors of the Federal Reserve. C. The Federal Open Market Committee. D. The executive branch of government.
When the labor market is in equilibrium so that the quantity of labor supplied equals the quantity demanded,
A) there is no unemployment. B) the economy is at full employment. C) nominal GDP equals real GDP. D) there is no inflation. E) real GDP might be more than, less than, or equal to potential GDP.