minimum of the LRAC, a single-producer monopoly is a likely outcome.

Shifting Patterns of Long-Run Average Cost

New developments in production technology can shift the long-run average cost curve in ways that can alter

the size distribution of firms in an industry.

For much of the twentieth century, the most common change had been to see alterations in technology, like the

assembly line or the large department store, where large-scale producers seemed to gain an advantage over

smaller ones. In the long-run average cost curve, the downward-sloping economies of scale portion of the

curve stretched over a larger quantity of output.

However, new production technologies do not inevitably lead to a greater average size for firms. For example,

in recent years some new technologies for generating electricity on a smaller scale have appeared. The
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