contestada

If an input necessary for production is in limited supply so that an expansion of the industry raises costs for all existing firms in the market, then the long-run market supply curve for a good could be a. perfectly elastic. b. upward sloping. c. perfectly inelastic. d. downward sloping.

Respuesta :

The correct option is, (b) upward sloping.

  • If an input necessary for production is in limited supply so that an expansion of the industry raises costs for all existing firms in the market, then the long-run market supply curve for a good could be upward sloping.

Why is curve upward sloping?

  • The AE curve shifts down as r increases, shifting the intersection of the AE curve and 45 degree line to the right with a greater semi-equilibrium level of Y.
  • This results in an upward slope for the IS curve.

Is the IS curve upward or downward sloping?

  • The downward slope of the IS curve results from the fact that when interest rates down, investment rises, increasing output.
  • The LM curve depicts the equilibrium of the money market. Because increased income raises demand for money and raises interest rates, the LM curve has an upward slope.

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