If input prices for a perfectly competitive industry remain constant as the output of the industry expands in the long run, the industry supply curve will:
A) have a positive slope.
B) be perfectly horizontal.
C) have a negative slope.
D) be perfectly vertical.

Question

Quizplus · Accepted Answer

If input prices remain constant and the industry expands, firms will be able to produce more output without incurring any additional costs. As a result, each individual firm's supply curve will remain the same, and as more firms enter the market, the overall industry supply curve will be perfectly horizontal at the constant price level.

If Input Prices for a Perfectly Competitive Industry Remain Constant