Exhibit 8.12

-Refer to Exhibit 8.12,which shows price per unit and quantity per period for an increasing-cost industry.After the entry of new firms,the short-run supply curve is _____

Question

Exhibit 8.12
 
-Refer to Exhibit 8.12,which shows price per unit and quantity per period for an increasing-cost industry.After the entry of new firms,the short-run supply curve is _____

Quizplus · Accepted Answer

After the entry of new firms, the industry supply curve will shift to the right, as shown by the shift from S to S'. This is because the entry of new firms increases the quantity supplied at any given price. Therefore, the short-run supply curve will be S'.

Exhibit 8.12 -Refer to Exhibit 8.12,which Shows Price Per Unit and Quantity