A raise in the demand for video films also raise the salaries of actors and actresses. Is the long-run supply curve for films probable to be horizontal or upward sloping? Describe.
The long-run supply curve is based on the cost configuration of the industry. If there is fixed supply of actors & actresses, as more films are generated, higher salaries have to be offered. Therefore, the industry experiences increasing costs. In increasing-cost industry, the long-run supply curve is rising sloping. Therefore, the supply curve for videos would be upward sloping.