The long-run supply curve for a constant-cost perfectly competitive industry is
A)a ray from the origin at a 45-degree angle
B)perfectly inelastic
C)somewhat inelastic
D)perfectly elastic
E)declining

Question

Quizplus · Accepted Answer

In a constant-cost perfectly competitive industry, firms can enter or exit the market without affecting the input prices. Thus, the long-run supply curve is perfectly elastic, meaning that firms can produce any quantity at the given market price.

The Long-Run Supply Curve for a Constant-Cost Perfectly Competitive Industry