If a perfectly competitive industry is characterized by increasing cost in the long run, its long-run:

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Quizplus · Accepted Answer

In a perfectly competitive industry, firms will enter the market in the long run if there are economic profits to be made. As firms enter, the supply of the industry will increase, causing the market price to fall. This, in turn, raises input prices and causes the cost curves of the firms to shift upward. Therefore, in an industry characterized by increasing costs in the long run, the industry supply curve will be upward sloping as input prices rise with increased output.

If a Perfectly Competitive Industry Is Characterized by Increasing Cost