Terms in this set (30) Due to specialization, more manufacturing businesses are able to increase productivity as an industry grows. It is likely that prices will go down in this industry.
What is an industry with declining costs?
An industry with decreasing costs is one in which a product's price goes down as production goes up. A long-run supply curve with a downward slope is the name given to the phenomenon.
Perfect competition does not have product differentiation as a feature. Perfect competition is characterized by price-taking behavior, buyer freedom of entry and exit, and a large number of buyers and sellers.
What long-term effects will an expanding market's demand have on an industry with rising costs?
The industry supply curve would also rise as a result. In the short term, the outcome would be a price increase that would be less than the increase in cost per unit. Companies would suffer financial losses, eventually leading to exit.
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