As more firms entered the personal computer industry, the component producers (the makers of computer components such as RAM or CPUs) were able to achieve economies of scale. Because of this, the personal computer industry is an example of a decreasing cost industry.

Question

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As more firms enter the personal computer industry, demand for components increases, allowing component producers to achieve economies of scale, which lowers the cost per unit. This can lead to lower prices for personal computers, making the industry an example of a decreasing cost industry.

As More Firms Entered the Personal Computer Industry, the Component