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Decreasing-Cost Industry Homework Help Assists Students in Accomplishing Success!

Decreasing-cost industry is a major study for economics students. Those aiming for a bright career in economic fields would benefit from the study of these industries related topics.

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Understanding decreasing cost industry

Stating some basic factors which distinguish decreasing cost industries will help in getting decreasing-cost industry homework help.

  • Decreasing-cost industry is a general term for all industries whose average costs decrease over a period of time.
  • As new firms enter market, prices of factors of production reduce. This results in reduction in average total costs.
  • These industries mainly use supplies that benefit from economies of scale.
  • Long run supply curve of this industry will be downward sloping.
  • Computer industry is an example of decreasing costs industry.

Reasons for decrease in costs

There may be several factors leading to a reduction in average total costs. An analysis of these factors is useful for students to procure best decreasing-cost industry assignment help.

  • Fixed costs portion:

In industries where fixed costs constitute major portion of total costs, increase in production will not cause substantial increase in total expenses. This is because fixed costs remain same irrespective of level of production. This results in lower costs over time.

  • Technological investments:

When a firm adopts new technology, it might help in reducing price by improving production process. So when there is increase in demand, firms adopt new technologies leading to lower costs.

  • More competitors:

More firms entering market will help in lowering average total costs as the price of supplies will be reduced. This is in contrast to increasing cost industries where more entrants cause prices to rise.

Understanding grueling topics

Study of deceasing- cost industry requires one to be aware of several related terms.

Economies of scale:

Many students searching for decreasing-cost industry homework help are confused about the meaning of this term. Economies of scale refer to price advantage arising out of large volumes of production. It states the inverse relation between costs and quantity produced.

As the output increases, costs reduce. In decreasing-cost industries, supplies will be mostly operating on economies of scale. This is the major reason for reduced costs. Economies of scale may be of two types, internal or external.

Supply curve:

Supply curve is the graphical representation of relation between price of goods and quantity supplied. It shows the quantity that supplier is ready to supply at different prices. Supply curve can be of two types, long run, and short run. In a decreasing-cost industry, long run curve will always be sloping downwards.

But it need not be so with short run curve as these industries will derive low costs benefits only in the long term. When students get questions about plotting the curves, they resort to decreasing-cost industry assignment help.

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