If the Long-Run Supply Curve in a Perfectly Competitive Industry

question 50

Multiple Choice

If the long-run supply curve in a perfectly competitive industry is upward sloping,this is because

• A) firms are different.
• B) firms are identical.
• C) input prices rise as the industry expands.
• D) Either A or C.

Understand the concept of diminishing returns and its effect on marginal and average product.

Describe the relationship between marginal cost and average cost, and their implications for cost behavior.

Comprehend the law of diminishing marginal productivity and its implications for output.

Analyze the impact of fixed and variable costs on average costs.

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Definitions:

Confederation

An organization that consists of a number of parties or groups united in an alliance or league, often referring to a union of states with limited central power.

Sovereign Authority

The ultimate power or authority within a given territory, typically held by a state or monarch, over which no other power can exercise control.

Central Body

The main or primary governing agency or organization within a larger system that coordinates and regulates activities across the system.

Member States

Entities that have agreed to form a federation or union, each maintaining control over its internal affairs while ceding certain powers to a central authority for mutual benefit.