Why Will the Long-Run Market Supply Curve for Most Products

question 71

Multiple Choice

Why will the long-run market supply curve for most products slope upward to the right?

• A) The firms producing the product will be unable to expand the size of their plant and equipment in the long run.
• B) Economies of scale are present in most industries.
• C) Most products are produced under conditions of constant cost.
• D) Resource prices will rise and push costs upward as the output of the industry expands.

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Definitions:

Groups of Assets

Collections of multiple assets owned by a company that are used together in the company's operations.

Depreciation

The systematic allocation of the cost of a tangible asset over its useful life, recognizing the asset's wear and tear, deterioration, or obsolescence.

Long-Lived Tangible Asset

Physical assets that have a useful life of more than one year, used in the operation of a company.

Future Periods

Timeframes that are ahead of the current date, focusing on planning or projections in accounting or strategic planning.