The long-run market supply curve would be downward-sloping if the representative firms'
A) demand curves shift up as the industry expands.
B) ATC curves shift down as the industry expands.
C) supply curves shift left as the industry expands.
D) demand curves shift down as the industry expands.

Question

Quizplus · Accepted Answer

The long-run market supply curve is downward-sloping if the ATC (average total cost) curves shift down as the industry expands. This is because as the industry expands, costs of production decrease due to economies of scale. This allows firms to produce at lower costs and offer goods at lower prices, which leads to an increase in supply. Therefore, the long-run market supply curve is downward sloping due to the decrease in costs of production with an increase in industry size.

The Long-Run Market Supply Curve Would Be Downward-Sloping If the Representative