AlexSchell comments on How much does consumption affect production? - LessWrong

4 Post author: erratim 05 January 2015 03:51PM

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Comment author: AlexSchell 07 January 2015 08:01:54PM 3 points [-]

Empirically, some industries are approximately constant-cost, others are increasing- and decreasing-cost. OP mentioned certain factors pushing one way or the other, but ultimately the slope of the long-run supply curve of an industry is determined by which factors predominate, so we'd have to measure it to be sure. What is generally true, however, is that long-run supply is typically highly elastic, so cost doesn't change much from marginal changes in demand.