A Long-Run Supply Curve That Is Downward-Sloping Indicates That the Firms

question 34

Multiple Choice

A long-run supply curve that is downward-sloping indicates that the firms' ATC curves

• A)shift up when the industry expands.
• B)shift down when the industry contracts.
• C)shift down when the industry expands.
• D)do not shift when the industry contracts.

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Definitions:

Labor

Pertains to the utilization of human labor, encompassing both physical and intellectual efforts, in the creation of products and services.

Marginal Rate

Often referred to in the context of taxes or production, indicating the rate of increase or the additional cost or benefit of producing one more unit of a good.

Technical Substitution

The process of replacing one input or factor of production with another to maintain the same level of output.

Marginal Product

The additional output that results from adding one more unit of a specific input, keeping all other inputs constant.