Entry of new firms in an increasing-cost industry leads to an downward shift of the LRAC curve.

Name: Entry of new firms in an increasing-cost industry leads to an downward shift of the LRAC curve.
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Question

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The entry of new firms in an increasing-cost industry leads to an upward shift of the LRAC curve, as additional firms entering the market cause input costs to increase, resulting in higher costs for all firms in the industry.

Entry of New Firms in an Increasing-Cost Industry Leads to an Downward