Figure 4.9 -Refer to Figure 4.9.Suppose the diagram shows the supply curves for a product in the short run and in the long run.Which supply curve represents supply in the short run and which curve represents supply in the long run? A)S_B represents supply in the short run, and S_A represents supply in the long run. B)Either S_A or S_B could represent supply in the short run; in the long run, the supply curve must be a vertical line. C)Either S_A or S_B could represent supply in the long run; in the short run, the supply curve must be a horizontal line. D)S_A represents supply in the short run, and S_B represents supply in the long run.

Question

Quizplus · Accepted Answer

In the short run, firms are unable to adjust their production capacity, so the supply curve is more inelastic, represented by S_A. In the long run, firms can adjust their production capacity, so the supply curve becomes more elastic and approaches a vertical line, represented by S_B. Therefore, Choice D is correct.

Figure 4.9 -Refer to Figure 4.9.Suppose the Diagram Shows the Supply Curves