The supply curve is upward sloping because __________.
costs increase when the price increases
quantity demanded decreases when price increases
As the price increases, suppliers can justify producing at higher marginal costs
All of the above
The supply curve is upward sloping because as price increases, suppliers can justify producing at higher marginal costs as long as MC < P.
Show with the help of a diagram, the effect on equilibrium price and quantity when: (i) Demand is perfectly elastic and supply decreases. (ii) Supply is perfectly inelastic and demand increases. (iii) The demand curve is perfectly elastic and the supply curve shifts outwards.
A 10% increase in the price of a good causes a 10% decrease in quantity supplied. The supply curve is a _______.