If a perfectly competitive industry experiences economies of scale as it expands, the long-run industry supply curve would be _____ and this industry would be classified as a(n) _____.

Question

Quizplus · Accepted Answer

Economies of scale imply that as the industry expands, the average costs of production decrease. Therefore, the long-run industry supply curve would be downward sloping, indicating that larger quantities can be supplied at lower prices. This characteristic defines a decreasing cost industry.

If a Perfectly Competitive Industry Experiences Economies of Scale as It