If a perfectly competitive industry's long-run supply curve is downward sloping, we can conclude that input prices will:
A) increase as industry output increases.
B) decrease as industry output increases.
C) remain constant as industry output increases.
D) none of these conclusions can be drawn.

Question

Quizplus · Accepted Answer

In a perfectly competitive industry with a downward sloping long-run supply curve, input prices decrease as industry output increases due to economies of scale or technological improvements.

If a Perfectly Competitive Industry's Long-Run Supply Curve Is Downward