Q122
Supply curve is
A.
Vertical in long run
B.
Flatter in long run
AnswerC.
Same in long and short run
D.
Horizontal in both short and long run
Answer: Option B
Solution
Answer: Option B
Solution:
Supply curve is Flatter in long run. All firms have identical cost conditions. Hence, in the case of a constant cost industry, the long-run supply curve LSC is a horizontal straight line (i.e., perfectly elastic) at the price OP, which is equal to the minimum average cost. This means that whatever the output supplied, the price would remain the same.