If the firm has economies of scale in the long run, then the long-run average cost curve is ______.

A. upward-sloping
B. horizontal
C. downward-sloping
D. It depends on whether there are diminishing returns.
E. It depends on the minimum efficient scale.

Correct Answer: C

Economies of scale: a proportional increase in inputs results in a more-than-proportional increase in outputs. Thus, average cost per unit must be falling.