Consider perfect competition: a) Identify two distinct reasons why a long-run supply curve for an industry...

Consider perfect competition:

a) Identify two distinct reasons why a long-run supply curve for an industry of perfectly competitive firms would be upward-sloping instead of horizontal.

b) Very briefly explain the conditions under which a perfectly competitive firm would choose to operate at a loss in the short run, and support your explanation with an appropriate diagram correctly illustrating relevant cost curves and ranges of output prices.

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Expert Solution

Rahul Sunny answered 1 year ago

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