A decreasing-cost industry is one in which
A)contraction of the industry will decrease unit costs.
B)input prices fall or technology improves as the industry expands.
C)the long-run supply curve is perfectly elastic.
D)the long-run supply curve is upsloping.

Question

Quizplus · Accepted Answer

In a decreasing-cost industry, as the industry expands, economies of scale, technological advancements, or reductions in input prices can lead to lower average costs. This is why option B is correct, as it directly refers to the conditions under which an industry's expansion leads to lower unit costs.

A Decreasing-Cost Industry Is One in Which