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Long-run market supply curves are upward sloping if firms are identical. the number of firms is restricted in the long run. input prices fall as the industry expands. All of the above

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Long-run market supply curves are upward sloping if

 

firms are identical.

 

the number of firms is restricted in the long run.

 

input prices fall as the industry expands.

 

All of the above

✅ Answers (1)

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Private answer
  • the number of firms is restricted in the long run.

Explanation:

In the long run, if the entry for new firms in the industry is limited, then the market supply curve will slope upward and the only way the output in that market can increase, is for existing firms to increase the quantity of goods they produce. Limited entry of new firms may be due to government restrictions, resource scarcity or high entry cost.  Another cause for the upward sloping supply curve in the long run is when the firms differ or are not identical such that firms with low minimum long-run average costs are willing ti enter the market even at lower prices than others.

 

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Answered on June 26, 2020 3:58 pm

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