A horizontal long-run industry supply curve occurs under conditions of
A)economies of scale
B)diseconomies of scale
C)monopoly
D)increasing costs
E)constant costs

Question

Quizplus · Accepted Answer

A horizontal long-run industry supply curve occurs when there are constant costs. This means that the cost of producing each additional unit of output does not change as industry output increases. In this case, firms can enter or exit the industry without affecting the costs of production for existing firms, resulting in a flat or horizontal industry supply curve.

A Horizontal Long-Run Industry Supply Curve Occurs Under Conditions of