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Homework answers / question archive / What is the shape of the long-run industry supply curve in a decreasing cost industry? A) Horizontal B) increasing C) upward sloping D) downward sloping
What is the shape of the long-run industry supply curve in a decreasing cost industry?
Option D) downward sloping is correct
This option is correct because, in long run, there is a downward shift in long-run average curve due to external economies of scale. It shows the inverse relationship between the average cost and output due to the downward-sloping curve.
