Assume that the personal computer industry is perfectly competitive.The fact that the price of personal computers over the last decade has fallen despite increases in demand signifies that the industry is a decreasing-cost industry.

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In a decreasing-cost industry, as production increases, the average cost of production decreases due to factors such as economies of scale. This leads to lower prices and higher output. The fact that the prices of personal computers have fallen despite an increase in demand over the last decade implies that the personal computer industry is a decreasing-cost industry.

Assume That the Personal Computer Industry Is Perfectly Competitive