When the market price in long-run equilibrium remains unchanged after an industry expands, then the long-run industry supply curve
A)is vertical.
B)is downward sloping.
C)is upward sloping.
D)is horizontal.
E)does not exist.

Question

Quizplus · Accepted Answer

When the market price remains unchanged after an industry expands in the long-run equilibrium, it indicates that the long-run industry supply curve is perfectly elastic, or horizontal. This suggests that the industry can expand without increasing the costs of production, keeping prices stable.

When the Market Price in Long-Run Equilibrium Remains Unchanged After