The long-run supply curve can be used to determine the long-run price after an increase in demand.

Question

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The long-run supply curve shows the relationship between the price of a good or service and the quantity supplied in the long run, when all inputs can be varied. If there is an increase in demand, in the long run, firms will have enough time to adjust their inputs and increase their production. This will shift the long-run supply curve to the right, indicating that at any given price, a larger quantity will be supplied. The intersection of the new long-run supply curve and the demand curve will determine the new long-run equilibrium price. Therefore, the long-run supply curve can be used to determine the long-run price after an increase in demand.

The Long-Run Supply Curve Can Be Used to Determine the Long-Run