Figure 6-5 -Refer to Figure 6-5.Suppose the diagram shows the supply curves for a product in the short run and in the long run.Which supply curve represents supply in the short run and which curve represents supply in the long run? A)S_B represents supply in the short run and S_A represents supply in the long run. B)Either S_A or S_B could represent supply in the short run; in the long run the supply curve must be a vertical line. C)Either S_A or S_B could represent supply in the long run; in the short run the supply curve must be a horizontal line. D)S_A represents supply in the short run and S_B represents supply in the long run.

Question

Quizplus · Accepted Answer

In the short run, supply is relatively inelastic because producers cannot easily adjust their output levels. This is represented by a steep supply curve, which is S_A in the diagram. In the long run, producers can adjust their output levels more easily by changing their inputs, so supply becomes more elastic. This is represented by a flatter supply curve, which is S_B in the diagram. Therefore, S_A represents supply in the short run and S_B represents supply in the long run.

Figure 6-5 -Refer to Figure 6-5.Suppose the Diagram Shows the Supply Curves