Principles of Microeconomics / Unit 7 MIC 0630 short lesson, about 20 seconds
Constant-Cost Industry
Captions available
The idea
In a constant-cost industry, expansion leaves input prices unchanged, so new firms have the same costs as old ones. The long-run supply curve is horizontal at minimum average total cost.
In practice
A small industry buying inputs from vast markets barely nudges their prices.
Where people slip
Horizontal long-run supply means any quantity at one price. Demand sets the quantity; cost alone sets the price.
Your place on the trail
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