A long-run supply curve that is downward-sloping indicates that the firms' ATC curves
A) shift up when the industry expands.
B) shift down when the industry contracts.
C) shift down when the industry expands.
D) do not shift when the industry contracts.

Question

Quizplus · Accepted Answer

A downward-sloping long-run supply curve suggests that as the industry expands, firms experience economies of scale, leading to lower average total costs (ATC).

A Long-Run Supply Curve That Is Downward-Sloping Indicates That the Firms