Assume that as the firms in a perfectly competitive industry expand output,the prices of productive inputs increase.All else constant,this would cause the individual firms' marginal cost curves to ________ and the market supply curve to become ________.

Question

Quizplus · Accepted Answer

If the prices of productive inputs increase as firms expand output, the firms' marginal cost curves will shift up due to higher input costs. This means that they will have to spend more to produce each additional unit of output. As a result, the market supply curve will become steeper because it will require a higher price to induce firms to produce each additional unit of output.

Assume That as the Firms in a Perfectly Competitive Industry