If the long-run supply curve is upward sloping, we know that
A) entrepreneurs are earning higher profits as output expands.
B) some input prices are increasing as the industry expands.
C) firms are getting larger as the industry contracts.
D) the law of diminishing marginal returns has set in.
Answer: B
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Which of the following increases the slope of the consumption function?
A) an increase in consumer wealth B) a decrease in the value of consumer durables C) an increase in consumer confidence D) an increase in the marginal propensity to consume
Although some economists believe network externalities are important barriers to entry, other economists disagree because
A) they believe that the dominant positions of firms that are supposedly due to network externalities are to a greater extent the result of economies of scale. B) they believe that most examples of network externalities are really barriers to entry caused by the control of a key resource. C) network externalities are really negative externalities. D) they believe that the dominant positions of firms that are supposedly due to network externalities are to a greater extent the result of the efficiency of firms in offering products that satisfy consumer preferences.