Which kind of industry would have a downward-sloping long-run supply curve?
A) a constant cost industry
B) an increasing cost industry
C) a decreasing cost industry
D) no industry

Question

Quizplus · Accepted Answer

In a decreasing cost industry, the long-run average cost curve (LRAC) slopes downward. This means that as more firms enter the market, costs decrease for all firms, including existing ones, as they can benefit from economies of scale. As a result, the long-run supply curve (LRS) also slopes downward, indicating that firms are willing and able to supply more output at lower prices.

Which Kind of Industry Would Have a Downward-Sloping Long-Run Supply