When some resources used in production are only available in limited quantities, it is likely that the long-run supply curve in a competitive market is
A)downward sloping.
B)upward sloping.
C)horizontal.
D)vertical.

Question

Quizplus · Accepted Answer

When resources used in production are limited, it typically leads to an increase in costs as output increases, which in turn causes the long-run supply curve in a competitive market to slope upward. This reflects the principle that scarcity of resources can lead to higher production costs, which are passed on in the form of higher prices.

When Some Resources Used in Production Are Only Available in Limited