Suppose several industries compete for the available supply of a particular input.In a multi-industry market like this,which of the following statements about the input supply curve facing a single industry will be true?
A)Each industry's input supply curve is an equal proportion of the total market supply of the input.
B)The vertical summation of the industry input supply curves gives the market supply curve for the input.
C)The smaller the share of the total input employed by the industry,the more elastic its input supply curve.
D)The input supply curve for a single industry in a multi-industry input market is perfectly elastic over all levels of employment of the input.

Question

Quizplus · Accepted Answer

The elasticity of an industry's input supply curve is influenced by the share of the total input it employs. A smaller share implies the industry has more alternatives and can more easily adjust to price changes, making its input supply curve more elastic.

Suppose Several Industries Compete for the Available Supply of a Particular