What are the two reasons for which a long-run supply curve may slope upwards?

Economics Dec 08, 2020

Expert Solution

A long-run supply curve is generally considered to be vertical by assuming that the full-employment level is obtained. A long-run supply curve could be upward sloping due to many reasons such as:

1. When an organization is experiencing increasing cost function, it tries to increase the output level due to which price level increases in the market as the output increases.

2. When there is a chance to use more resources or change the production process's current level of input resources, it could be done through technological advancement.

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