A long-run supply curve that is flatter than a short-run supply curve results from which of the following: a

Economics Dec 08, 2020

A long-run supply curve that is flatter than a short-run supply curve results from which of the following:

a. Firms can enter and exit a market more easily in the long run than in the short run,

b. Long-run supply curves are sometimes downward sloping,

c. Competitive firms have more control over demand in the long run,

d. Firms in a competitive market face identical cost structures.

Expert Solution

The correct answer is a. Firms can enter and exit a market more easily in the long run than in the short run.

It is always easier for new entrants to penetrate a market (or slowly exit) when the supply curve is relatively flatter because it is not necessary to scale production up and down as quickly as with an upward sloping supply curve.

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