The long-run supply curve for a competitive industry may be upward sloping if
A)there are barriers to entry.
B)firms that enter the industry are able to do so at lower average total costs than the existing firms in the industry.
C)some resources are available only in limited quantities.
D)accounting profits are positive.

Question

Quizplus · Accepted Answer

If some resources are available only in limited quantities, the industry supply will be limited in the long run and the long-run supply curve will be upward sloping. This is because as the quantity produced increases, the cost of production increases due to the scarcity of resources. The other options (A, B, D) do not lead to an upward sloping long-run supply curve.

The Long-Run Supply Curve for a Competitive Industry May Be