Suppose that the long-run industry supply in the production of synthetic fabrics is perfectly elastic. Which of the following statements is then true?
a. The marginal cost curve of each synthetic-producing firm is horizontal.
b. The existence of profit within the industry will not draw new firms into the market.
c. The long-run industry supply for synthetics is horizontal.
d. The long-run industry supply for synthetics is upward sloping.
Ans: c. The long-run industry supply for synthetics is horizontal.
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