What determines whether the industry long-run supply curve is upward sloping or horizontal?

What will be an ideal response?

ANSWER:

When firms enter and exit the industry, new resources are either drawn into the industry or are temporarily left unemployed. If these movements in resources cause resource prices to rise, then the industry will be an increasing-cost industry and have an upward sloping long-run supply curve. If these movements in resources do not affect resource prices, then the industry is a constant-cost industry and the long-run supply curve is horizontal.