If a perfectly competitive industry's long-run supply curve is downward-sloping, what can we conclude about input prices?
A) they will increase as industry output increases.
B) they will decrease as industry output increases.
C) they will remain constant as industry output increases.
D) they will decrease as industry output decreases.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, if the long-run supply curve is downward-sloping, it implies that as the industry expands and output increases, the input prices decrease. This could be due to economies of scale, improvements in technology, or increased efficiency, leading to lower costs of production as the industry grows.

If a Perfectly Competitive Industry's Long-Run Supply Curve Is Downward-Sloping