Question

If the long-run market supply curve for a perfectly competitive market is upward sloping, then this industry exhibits _____ costs. increasing decreasing constant an absence of marginal

Answer 1

When a perfectly competitive market has a long-run market supply curve that is upward sloping, then that market has increasing costs.

A market supply curve that is upward sloping means that:

• Costs increase as production quantity increases
• Suppliers will produce more if prices rise as well

In such a market, suppliers face increasing costs as they produce more which is why they will demand higher prices in order to produce more so that they can cover their costs.

In conclusion, such a market will have increasing costs.

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