Consider the short-run supply curve for a perfectly competitive industry.In general,which of the following statements are true?

Question

Quizplus · Accepted Answer

Option A is correct because to derive the short-run industry supply curve, the individual supply curves of all firms in the industry are horizontally summed.
Option B is correct because the industry supply curve tends to be flatter (more elastic) than the horizontal sum of all the individual firms' supply curves due to the fact that with an increase in price, new firms are likely to enter the market in the short run, leading to a more significant increase in the quantity supplied.
Option C is incorrect because the shape of the short-run supply curve for a perfectly competitive industry is different for different types of industries (i.e., increasing cost, constant cost, or decreasing cost).

Consider the Short-Run Supply Curve for a Perfectly Competitive Industry