Order the answer to: This question is based on…
Question | This question is based on the section The Long-Run Industry Supply Curve found on this book’s MyEconLab (www.myeconlab.com). A major theme of this chapter is the role that free entry and exit play in determining a competitive industry’s long-run equilibrium. Keeping this theme in mind, consider the following statement: In Industry X, demand and supply do determine price in the short run, but in the long run, only supply matters. a. Assuming that Industry X is a constant-cost industry, use a demand-and-supply diagram to illustrate why the statement is exactly correct. b. Now, assuming that Industry X is an increasing-cost industry, show in a demand-and-supply diagram why the statement is not quite correct. |
---|---|
Subject | business-economics |
Have a writer answer this question by clicking below. If you have any questions you can contact us via live chat.