Asked by Courtney Gardner on May 25, 2024
Verified
A constant-cost industry is one in which:
A) a higher price per unit will not result in an increased output.
B) if 100 units can be produced for $100,then 150 can be produced for $150,200 for $200,and so forth.
C) the demand curve and therefore the unit price and quantity sold seldom change.
D) the total cost of producing 200 or 300 units is no greater than the cost of producing 100 units.
Unit Price
The cost assigned to a single unit of a product or service, making it easier to compare the value of similar products or services.
Constant-Cost Industry
An industry in which the costs of production, including input prices, do not change as the industry's output changes.
Total Cost
The complete cost of production, including both fixed and variable costs incurred in the creation of a good or service.
- Distinguish the qualities and implications associated with constant-cost, increasing-cost, and decreasing-cost industries.
Verified Answer
CW
colette walkerMay 29, 2024
Final Answer :
B
Explanation :
In a constant-cost industry, the cost per unit of production remains constant, regardless of the level of output. This means that if 100 units can be produced for $100, then the cost per unit remains the same for larger production quantities, such as 150 for $150 and 200 for $200. This distinguishes a constant-cost industry from economies of scale, in which the cost per unit decreases as the level of output increases.
Learning Objectives
- Distinguish the qualities and implications associated with constant-cost, increasing-cost, and decreasing-cost industries.