Copyright © 1995-2004 OnLineTexts.com, Inc. - All Rights Reserved
In this case, the LRS curve will be upward sloping, as shown. As demand increases, higher
long run equilibrium prices are required for the firms in the industry to return to zero profits.
Remember that this upward sloping LRS curve is the result of cost changes in inputs or factors of production
used by the perfectly competitive firms, or by changes in production
costs in firms that supply inputs to the perfectly competitive
industry.
Copyright © 1995-2004 OnLineTexts.com, Inc. - All Rights Reserved