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

Economics Dec 08, 2020

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

Expert Solution

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.

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