Question

Which of the statements is true of the long‑run industry supply curve (LRIS)? External diseconomies result in an increasing cost industry and a horizontal LRIS curve. External economies result in an increasing cost industry and a downward sloping LRIS curve. External economies result in a decreasing cost industry and a downward sloping LRIS curve. Internal diseconomies result in an increasing cost industry and an upward sloping LRIS curve.

Answer 1

The correct answer is External economies result in a decreasing cost industry and a downward sloping LRIS curve.

Step-by-step explanation:

Solution:

From the given question stated, the best statement that sis true of the long‑run industry supply curve (LRIS) is, because of external economies of scale, a larger or bigger quantity of the product is offered at a lower price which is a decreasing/reducing cost industry with an exception to the Law of Supply),the industry supply curve is downward sloping.