Give Two Reasons Why the Long-Run Industry Supply Curve May

question 28

Essay

Give two reasons why the long-run industry supply curve may slope upward. Use an example to demonstrate your reasons.

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Definitions:

Marginal Productivity Theory

An economic theory that suggests the value of a good or service is determined by the productive resources involved in its production, emphasizing the contribution of each unit of labor or capital.

Income Distribution

Refers to the way in which total income is shared among the members of a society.

Government Subsidy

A financial contribution provided by the government to individuals, businesses, or other organizations, aimed to support or stimulate economic activity.

Superstars Pay

Refers to the significantly high salaries or earnings of top performers or individuals in specific industries such as sports, entertainment, and business due to their exceptional skill, talent, or marketability.