The Industry's Long-Run Supply Curve
* Long-Run Elasticity of Supply
1) Constant-cost industry
- Long run supply is horizontal
- Small increase in price will induce extremely large output increase
- Long run supply elasticity is considerably large
- Inputs would be available readily
2) Increasing cost industry
- Long run supply is sloping upward and elasticity is positive
- The slope will depend on rate of increase in input cost
- Long run elasticity will usually be greater than short run elasticity of supply