Asked by Tania Alvarez Avila on Mar 10, 2024
Verified
Input prices fall as entry occurs in an increasing-cost industry.
Increasing-Cost Industry
An industry in which production costs increase as output expands, often due to factors like resource depletion or increased demand for inputs.
Entry
The act of a new competitor joining a market, which can influence market dynamics, prices, and competitive strategies.
Input Prices
Refers to the costs associated with the goods and services used in the production of another product, affecting the overall cost of production.
- Study the effects of market entry and exit on the state of supply in an industry.
Verified Answer
MK
McKenna Kuehl
Mar 10, 2024
Final Answer :
False
Explanation :
In an increasing-cost industry, input prices tend to rise as firms enter the market, because the increased demand for inputs drives up their prices.
Learning Objectives
- Study the effects of market entry and exit on the state of supply in an industry.