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An industry where a change in the number of firms does not affect the prices of...

An industry where a change in the number of firms does not affect the prices of the resources used in the industry will have a long-run supply curve that is

A) vertical B) horizontal C) upsloping D) downsloping

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Answer #1

As it has been given that an industry where a change in the number of firms does not affect the prices of the resources used in the industry will have a long-run supply curve that is horizontal line.

This is because when number of firms change in the long-run, then the supply of good will also change but the change in supply of goods have no effect on the price. It means the supply curve is horizontal line and in case of horizontal line supply curve, the price does not change with the change in the price level.

Hence option B is the correct answer.

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