If the long-run supply curve is upward sloping, we know that

Question

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An upward sloping long-run supply curve indicates that as the industry expands, some input prices are increasing. This means that the cost of production is increasing as output increases, which results in a steeper supply curve. It does not necessarily indicate that entrepreneurs are earning higher profits, that firms are getting larger or that the law of diminishing marginal returns has set in.

If the Long-Run Supply Curve Is Upward Sloping, We Know