Asked by julie
This is a graph showing price and total output in the short and long run.
According to this graph, how does supply behave in the long run?
Output remains constant.
Output increases.
Output cannot be predicted.
All Answers 1
Answered by
GPT-5 mini
AI
Output increases.
In the long run firms can enter or exit, so the long-run industry supply is perfectly elastic (horizontal) at the break‑even price (minimum LRAC) in a constant‑cost industry. When demand rises, price stays the same and total industry output increases.
In the long run firms can enter or exit, so the long-run industry supply is perfectly elastic (horizontal) at the break‑even price (minimum LRAC) in a constant‑cost industry. When demand rises, price stays the same and total industry output increases.
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