Which statement is true? Group of answer choicesIn an increasing-cost industry, a firm’s long-run supply curve is perfectly elastic at the minimum of ATC and the long- run industry supply curve is upward sloping.In an increasing-cost industry, a firm’s long-run supply curve is upward sloping and the long run industry supply curve is also upward sloping.In a decreasing-cost industry, a firm’s long-run supply curve is upward sloping and the long-run industry supply curve is perfectly elastic at the minimum of ATC.In an increasing-cost industry, a firm’s long-run supply curve is upward sloping and the long-run industry supply curve can either be perfectly elastic or upward sloping, depending on the circumstances.None of the above.
Question
Which statement is true? Group of answer choicesIn an increasing-cost industry, a firm’s long-run supply curve is perfectly elastic at the minimum of ATC and the long- run industry supply curve is upward sloping.In an increasing-cost industry, a firm’s long-run supply curve is upward sloping and the long run industry supply curve is also upward sloping.In a decreasing-cost industry, a firm’s long-run supply curve is upward sloping and the long-run industry supply curve is perfectly elastic at the minimum of ATC.In an increasing-cost industry, a firm’s long-run supply curve is upward sloping and the long-run industry supply curve can either be perfectly elastic or upward sloping, depending on the circumstances.None of the above.
Solution 1
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Solution 2
The correct answer is: In an increasing-cost industry, a firm’s long-run supply curve is upward sloping and the long run industry supply curve is also upward sloping.
In an increasing-cost industry, as firms expand production, the costs of production also increase. This is reflected in the firm's long-run supply curve, which is upward sloping. The industry supply curve is also upward sloping, indicating that as the price increases, firms are willing to supply more, but at a higher cost.
Similar Questions
Which statement is true? Group of answer choicesThe long-run supply curve for a competitive firm is its long-run marginal cost curve above the minimum of AVC.The long-run supply curve for a competitive firm is its long-run marginal cost curve above the minimum of ATC.The long-run supply curve for a competitive firm is its long-run marginal cost curve above the minimum of AFC.The long-run supply curve for a competitive firm is its long-run marginal cost curve.None of the above.
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