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Economic Definition of decreasing-cost industry. Defined.

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Term decreasing-cost industry Definition: A perfectly competitive industry with a negatively-sloped long-run industry supply curve that results because expansion of the industry causes lower production cost and resource prices. For a decreasing-cost industry the entry of new firms, prompted by an increase in demand, causes the long-run average supply curve of each firm to shift downward, which decreases the minimum efficient scale of production.

 

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