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marginal cost curve remains the supply curve
in the long run. However, it may 
no longer be upward sloping.
The supply curve was upward sloping in the short run because of the impact of diminishing returns on 
the marginal cost curve. However, this is only a short run phenomenon, because the constraint of one 
factor of production being fixed is only a short run condition.
In the long run, the supply curve could still be upward sloping (if the firm suffers from diseconomies of 
scale) but it could equally be downward sloping to the right if the firm benefits from economies of scale. 
The curve could even be horizontal if the firm's marginal cost remained constant at all levels of output. 
The full cost-plus pricing theory also retains a horizontal supply curve in the long run. The level of the 
curve relative to the short run will depend on whether the firm experiences any economies or 
diseconomies of scale. However, the maximum and minimum output levels will still be where AC = AR.
5.5 Factors influencing the supply quantity 
The quantity supplied of a good depends, as you might expect, on prices and costs. More specifically, it 
depends on the following factors. 
(a) The 
costs of making the good
. These include raw materials costs, which ultimately depend on 
the prices of factors of production (wages, interest rates, land rents and profit expectations). 
(b) The 
prices of other goods
. When a supplier can switch readily from supplying one good to 
another, the goods concerned are called 
substitutes in supply
. An increase in the price of one 
such good would make the supply of another good whose price does not rise less attractive to 
suppliers. When a production process has two or more distinct and separate outputs, the goods 
produced are known as 
goods in joint supply
or