An industry that has increasing returns to scale and fixed factor prices will have a long-run supply curve that is
A)vertical.
B)horizontal.
C)upward sloping.
D)downward sloping.

Question

Quizplus · Accepted Answer

In an industry with increasing returns to scale, as production increases, the average cost of production decreases. This leads to a downward sloping long-run supply curve because firms can supply more at a lower cost.

An Industry That Has Increasing Returns to Scale and Fixed