Question

If many firms enter the computer software industry and consequently bid up the price of programmers, then:

a. the average fixed cost curve will slope upward.

b. the long-run industry supply curve will slope upward.

c. the long-run industry supply curve will slope downward.

d. there will be a downward shift of the SRATC curve.

Answer 1

the correct option is C) If many firms enter the computer software industry and consequently bid up the price of programmers, then: the long-run industry supply curve will slope downward.

Step-by-step explanation:

When many firm enter an industry, there is competition and the presence of multiple players will eventually cause the cost of production to decline.

In the short run, if many firms enter the computer software industry and consequently bid up the price of programmers, then the increase in participation will increase the number of software developed.

In the long run, industry supply curve will slop downwards indicating a price reduction.