Final answer:
The long-run industry supply curve can be horizontal due to factors like technological advancements and market competition. In a constant cost industry, input costs do not increase with increased production, keeping the curve horizontal. The short-run supply curve is upward sloping due to the law of supply.
Step-by-step explanation:
The long-run industry supply curve can be horizontal even though the short-run supply curve has a positive slope because of the difference in factors influencing supply in the long-run and short-run. In the short-run, supply reacts to changes in price due to the law of supply; as prices increase, the quantity supplied also increases, resulting in a positively sloped curve. However, in the long-run, factors like technological advancement and market competition contribute to creating a horizontal supply curve, especially in a constant cost industry.
In three types of industries, namely constant cost, increasing cost, and decreasing cost industries, the long-run supply curve is influenced differently. For instance, in an increasing cost industry, as the market expands, both old and new firms may experience a rise in their production costs due to limited inputs
There is a balancing act between output levels and costs, often illustrated in the average cost curve. In a constant cost industry, the supply curve may be horizontal because input costs do not rise with increased production. This is possibly due to factors such as technological advancements that reduce production costs, enabling firms to supply more at the same price, thereby keeping the long-run supply curve horizontal.