If input prices for a perfectly competitive industry remain constant as the output of the industry expands in the long run,the industry supply curve will:

Question

Quizplus · Accepted Answer

In a perfectly competitive industry, firms have no market power and are price-takers, meaning they must accept the market price for their output. If input prices remain constant as the industry expands in the long run, firms will continue to produce at the same marginal cost and therefore the same minimum acceptable price. This results in a perfectly horizontal industry supply curve, as any increase in demand will lead to an increase in output with no change in price.

If Input Prices for a Perfectly Competitive Industry Remain Constant