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

question 22

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.

---

Definitions:

Unsecured Creditors

Creditors who have lent money without taking any collateral, thus bearing a higher risk in case of debtor's default.

Liabilities With Priority

Obligations that are given preference over other liabilities in the case of liquidation or bankruptcy, often secured or legally mandated.

Liquidation

The process of closing down a business by selling its assets to pay off its debts, with any leftovers being distributed to shareholders.

Reorganization

The act of restructuring a company's business or legal structure, often for reasons related to improving the company's operations, efficiency, or to adjust to financial instability.