Which of the following statements is correct?
A)The long-run supply curve for a purely competitive increasing-cost industry will be upsloping.
B)The long-run supply curve for a purely competitive increasing-cost industry will be perfectly elastic.
C)The long-run supply curve for a purely competitive industry will be less elastic than the industry's short-run supply curve.
D)The long-run supply curve for a purely competitive decreasing-cost industry will be upsloping.

Question

Quizplus · Accepted Answer

The long-run supply curve for a purely competitive increasing-cost industry is upsloping because, as industry output increases, the prices of input resources rise, leading to higher production costs and thus higher prices for the final goods.

Which of the Following Statements Is Correct