An industry experiencing increasing returns to scale and fixed factor prices will have a long-run supply curve that is:

Name: An industry experiencing increasing returns to scale and fixed factor prices will have a long-run supply curve that is:
Brand: Quizplus
Rating: 4.9 (55 reviews)

Question

Quizplus · Accepted Answer

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

An Industry Experiencing Increasing Returns to Scale and Fixed Factor