Improvement in technology in the entire industry or an increase in the education of employees creates a(n):
a. increasing cost industry.
b. a downward sloping LRS.
c. constant cost industry.
d. decreasing cost industry.
d. decreasing cost industry.
For a decreasing cost industry, as the market expands, the old and new firms experience lower costs of production, which makes the new zero-profit level intersect at a lower price than before. In this case, the industry and all the firms in it are experiencing falling average total costs. This can be due to an improvement in technology in the entire industry or an increase in the education of employees.
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