The ability of firms to enter and exit a market over time means that, in the long run, a

Economics Dec 08, 2020

The ability of firms to enter and exit a market over time means that, in the long run,

a. the demand curve is more elastic,

b. the demand curve is less elastic,

c. the supply curve is more elastic,

d. the supply curve is less elastic.

Expert Solution

The correct option is c. the supply curve is more elastic.

Explanation:

Here, according to the given information, firms are able to enter and exit in the long-run as well, which will lead to an influence on the supply of various commodities and services in the market. As a result, freedom of entry or exist will make the supply more elastic than when a market faces entry barriers in the long-run.

Archived Solution

Unlocked Solution

You have full access to this solution. To save a copy with all formatting and attachments, use the button below.

Already a member? Sign In

Important Note: This solution is from our archive and has been purchased by others. Submitting it as-is may trigger plagiarism detection. Use it for reference only.

For ready-to-submit work, please order a fresh solution below.

Or get 100% fresh solution

Get Custom Quote