A Long-Run Supply Curve Is Flatter Than a Short-Run Supply

question 277

Multiple Choice

A long-run supply curve is flatter than a short-run supply curve because

• A)firms can enter and exit a market more easily in the long run than in the short run.
• B)long-run supply curves are sometimes downward sloping.
• C)competitive firms have more control over demand in the long run.
• D)firms in a competitive market face identical cost structures.

---

Definitions:

Erosion

The process of gradual diminishment or reduction, often used in finance to describe the erosion of value or profit.

Incremental Cash Flow

The additional cash flow a project generates compared to a baseline or the current level.

Cost Of Goods Sold

Financial expenditures directly linked to the production of goods sold by a business, involving materials and labor.

Pro Forma Statements

Financial statements prepared to predict the financial position of a company under certain hypothetical scenarios or planning for future operations.