The entry and exit of firms ensure that the ___________ in the long run than in the short run.

Question

Quizplus · Accepted Answer

The entry and exit of firms in the long run allow for greater flexibility and adjustment of the market supply curve. This means that the market supply curve is much more elastic in the long run, as firms are able to adjust their production levels and exit the market if necessary. In the short run, firms may face fixed costs or other barriers to entry or exit, leading to a more inelastic supply curve.

The Entry and Exit of Firms Ensure That the ___________