The expansion of capital that can occur in the long-run but not,by definition,in the short-run,means that the long-run supply is
A) perfectly horizontal while the short-run supply curve is upward sloping.
B) sloping downwards while the short-run supply curve is upward sloping.
C) less elastic than the short-run supply curve.
D) more elastic than the short-run supply curve.

Question

Quizplus · Accepted Answer

In the long-run, firms have the ability to expand their capital and thus increase their production capacity, making their supply more elastic than in the short-run. Therefore, the long-run supply curve is more elastic than the short-run supply curve.

The Expansion of Capital That Can Occur in the Long-Run