Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Confused on how to find the long-run supply
Transcribed Image Text:The following graph shows the short-run supply curve for pears.
Place the orange line (square symbol) on the graph to show the most likely long-run supply curve
for pears. (Note: Place the points of the line either on N and M or on N and L.)
PRICE (Dollars per pound)
48
40
32
24
16
8
0
0
N
2
6
8
QUANTITY (Thousands of pounds of pears)
Short-Run Supply
M
10
12
-
Long-Run Supply
Expert Solution
Step 1
The supply curve depicts the positive relationship between price and quantity supplied, keeping other factors of supply constant.
In the short run, the quantity supplied is less responsive to changes in price.
In the long run, the quantity supplied is more responsive to changes in price.
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