Asked by Kiasha Trammell on May 23, 2024
Verified
The long-run supply curve for a decreasing-cost industry is downsloping.
Decreasing-Cost Industry
An industry in which expansion through the entry of firms lowers the prices that firms in the industry must pay for resources and therefore decreases their production costs.
Long-Run Supply Curve
As it applies to macroeconomics, a supply curve for which price, but not real output, changes when the demand curves shifts; a vertical supply curve that implies fully flexible prices.
Downsloping
Typically describes a graph line that shows a decrease in a variable as another variable increases, often used in economics to illustrate concepts like demand curves.
- Recognize the behavior of long-run supply curves in response to industry cost changes and market entry/exit.
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Learning Objectives
- Recognize the behavior of long-run supply curves in response to industry cost changes and market entry/exit.
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