In the long run, a constant cost industry
A)has an upward sloping supply curve as the quantity supplied increases with increases in demand
B)expands in response to an increase in demand despite rising input costs, and so the long run supply curve is horizontal
C)can expand in response to an increase in demand without input costs changing, and so the long run supply curve is horizontal
D)does not expand in response to an increase in demand and so the long run supply curve is horizontal

Question

Quizplus · Accepted Answer

In a constant cost industry, firms can expand their production in response to an increase in demand without experiencing a change in input costs. This results in a long-run supply curve that is horizontal, indicating that the price does not change as the industry's output changes.

In the Long Run, a Constant Cost Industry