In a constant cost industry, which of the following statements is true?
A)The long run market supply curve and the long run firm supply curve are both horizontal.
B)While the long run market supply curve is horizontal, the long run firm supply curve generally is upwards sloping.
C)The long run market supply curve and the long run firm supply curve are both upwards sloping.
D)While the long run market supply curve is upwards sloping, the long run firm supply curve is horizontal.

Question

Quizplus · Accepted Answer

In a constant cost industry, the long run market supply curve is horizontal because costs do not change with industry output. However, the long run firm supply curve is typically upwards sloping due to increasing marginal costs as output increases.

In a Constant Cost Industry, Which of the Following Statements