A downward- sloping LRAC curve will shift downward because of
A) factor substitution.
B) a decrease in factor prices.
C) specialization.
D) economies of scale.
E) the use of large, specialized machinery as the volume of output increases.

Question

Quizplus · Accepted Answer

A decrease in factor prices reduces the cost of production, leading to a downward shift in the long-run average cost (LRAC) curve.

A Downward- Sloping LRAC Curve Will Shift Downward Because of