If an industry's long-run per-unit costs decrease as its output increases then

Question

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A decreasing-cost industry is one in which the long-run per-unit costs decrease as output increases. Therefore, if an industry's long-run per-unit costs decrease as its output increases, the firm is most likely a decreasing-cost industry. Option A is incorrect because it is possible for the firm to still earn economic profits in the long run, although they may decrease as more firms enter the market as a result of reduced per-unit cost. Option C is incorrect because an increasing-cost industry is one in which long-run per-unit costs increase as output increases. Option D is incorrect because a constant-cost industry is one in which long-run per-unit costs remain constant as output increases.

If an Industry's Long-Run Per-Unit Costs Decrease as Its Output