In the long run, new firms can enter an industry and so the supply elasticity tends to be:
A) more elastic than in the short run.
B) less elastic than in the short run.
C) perfectly elastic.
D) perfectly inelastic.

Question

Quizplus · Accepted Answer

In the long run, new firms can enter the industry, which increases competition and supply. This makes it easier for firms to increase or decrease their production level in response to changes in demand, making supply more elastic than in the short run.

In the Long Run, New Firms Can Enter an Industry