Asked by Krista McGonigle on Jun 30, 2024
Verified
Supply curves tend to be:
A) perfectly elastic in the long run because consumer demand will have sufficient time to adjust fully to changes in supply.
B) more elastic in the long run because there is time for firms to enter or leave the industry.
C) perfectly inelastic in the long run because the law of scarcity imposes absolute limits on production.
D) less elastic in the long run because there is time for firms to enter or leave an industry.
Supply Curves
Graphical representations showing the relationship between the price of a good and the quantity of that good that suppliers are willing and able to sell, holding other factors constant.
Long Run
A period in economics in which all factors of production and costs are variable, allowing all inputs to be adjusted.
- Detail the nuances differentiating elastic, inelastic, and unitary supply and demand.
- Investigate the role time plays in affecting the responsiveness of both supply and demand.
Verified Answer
LM
Leonardo MartínezJul 06, 2024
Final Answer :
B
Explanation :
In the long run, firms have time to enter or leave the industry, leading to more elastic supply curves. In the short run, the supply curve is less elastic because firms may not have the ability to quickly adjust their output levels.
Learning Objectives
- Detail the nuances differentiating elastic, inelastic, and unitary supply and demand.
- Investigate the role time plays in affecting the responsiveness of both supply and demand.