The long-run supply curve for a perfectly competitive, constant-cost industry
A)is upward-sloping.
B)is horizontal.
C)is downward-sloping.
D)is found by adding up the marginal cost curves for all firms in the industry.

Question

Quizplus · Accepted Answer

The long-run supply curve for a perfectly competitive, constant-cost industry is horizontal because in the long run, all firms have enough time to adjust their production levels and there are no barriers to entry or exit. As a result, the supply of the industry is perfectly elastic at the market price, and any increase or decrease in demand can be met by new firms entering or existing firms exiting the market without affecting the market price.

The Long-Run Supply Curve for a Perfectly Competitive, Constant-Cost Industry