Economists study decreasing cost industries in order to explain:
A) why profits may remain above normal in the long run for some firms.
B) the existence of industry clusters.
C) economies of scale.
D) why supply curves slope upward.

Question

Quizplus · Accepted Answer

Decreasing cost industries often lead to industry clusters because as more firms enter the market, costs decrease due to factors like shared suppliers or a skilled labor pool, encouraging more firms to locate in the same area.

Economists Study Decreasing Cost Industries in Order to Explain