Some firms eventually experience problems with their capacity to produce output as their output levels increase.For these firms,
A)market power is substantial.
B)supply is perfectly inelastic.
C)supply is more elastic at low levels of output and less elastic at high levels of output.
D)supply is less elastic at low levels of output and more elastic at high levels of output.

Question

Quizplus · Accepted Answer

As output levels increase, firms may face capacity constraints, making it harder to increase production, thus supply becomes less elastic at high levels of output.

Some Firms Eventually Experience Problems with Their Capacity to Produce