If Input Prices for a Perfectly Competitive Firm Increase as the Output

question 79

Multiple Choice

If input prices for a perfectly competitive firm increase as the output of the industry expand in the long run, the long-run industry supply curve will:

• A) have a positive slope.
• B) have a negative slope.
• C) be perfectly horizontal.
• D) be perfectly vertical.

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Definitions:

Direct Labor-Hours

The cumulative amount of time employees spend specifically on the creation of goods or services.

Variable Overhead

Costs that fluctuate with production volume, such as utilities or indirect materials, which are not directly tied to any single product.

Direct Materials

Basic substances that can be directly linked to the manufacture of particular products or services.

Direct Labor-Hours

A measure of the amount of time workers spend on a particular job or production process, used to assign labor costs to units of output.