A perfectly competitive industry characterized by increasing costs has a downward-sloping long-run industry supply curve.

Question

Quizplus · Accepted Answer

In a perfectly competitive industry, the long-run industry supply curve is typically horizontal because firms can enter and exit the industry as needed to maintain a constant market price. The curve may only slope upwards if there are external factors such as limited resources or regulatory barriers that prevent new firms from entering the market. Additionally, increasing costs would generally shift the short-run supply curve upwards, but it would not necessarily impact the long-run supply curve.

A Perfectly Competitive Industry Characterized by Increasing Costs Has a Downward-Sloping