What is a long-run supply curve? What does a long-run supply curve look like on a perfectly competitive market graph?
What will be an ideal response?
A long-run supply curve shows the relationship in the long run between market price and the quantity supplied. On a perfectly competitive market graph, the long-run supply curve is a horizontal line at the market price.
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If economics is correct in its assumption that people are rational, why then would anyone choose to smoke cigarettes?
Given that Sandy can produce 10 economics reports or make 2 sales calls and Tim can produce 2 economics reports or make 1 sales call, we can conclude that
A) Sandy should specialize in economics reports, and Tim should specialize in sales calls. B) Sandy should produce both economics reports and sales calls since she cannot possibly gain from trade with Tim. C) Tim should specialize in producing economics reports, and Sandy should specialize in producing sales calls. D) Tim should produce both economics reports and sales calls.
Average variable cost is equal to
A. average cost plus average fixed cost. B. marginal cost plus average fixed cost. C. marginal cost. D. average total cost minus average fixed cost.
An aggregate production function:
A) shows various combinations of labor and capital that can be used to produce a particular good. B) shows various quantities of two goods that can be produced at a given cost. C) shows the relationship between a country's GDP and its factors of production. D) shows the relationship between a country's output and its price level.