The long-run supply curve for a competitive constant-cost industry is:
A) horizontal.
B) vertical.
C) upward-sloping.
D) downward-sloping.

Question

Quizplus · Accepted Answer

In a competitive constant-cost industry, firms can enter or exit the market without affecting the market price. As a result, the market price remains constant in the long-run. Firms can produce any level of output at the same cost per unit. Therefore, the long-run supply curve is horizontal, indicating that firms are willing to supply any quantity of output at the market price.

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