If the demand curve in a decreasing cost market shifts up and to the right, then:
A)the long run price decreases and the long run quantity increases.
B)the long run price and quantity increase.
C)the long run price stays the same and the long run quantity increases.
D)the long run price and quantity decrease.

Question

Quizplus · Accepted Answer

In a decreasing cost market, when demand increases (shifts up and to the right), economies of scale or other efficiencies often mean that the cost of producing each additional unit decreases. As a result, the long-run supply curve can shift down or to the right, leading to a lower price and higher quantity in the long run.

If the Demand Curve in a Decreasing Cost Market Shifts