An industry in which expansion through the entry of firms decreases the prices, firms in the industry must pay for resources and there fore decreases their production costs ?
Correct answer: B. Decreasing cost industry
- A. Declining industry
- B. Decreasing cost industry
- C. Both
- D. None
Explanation
A decreasing-cost industry experiences lower production costs as industry output and the number of firms expand, usually because of external economies. A declining industry refers to shrinking demand or output, not falling costs from expansion.
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