If an industry is a constant-cost industry
A)prices of its inputs increase even though output remains constant
B)it uses inputs at higher levels of output
C)prices of its inputs rise at a constant rate as it uses more inputs
D)prices of its inputs remain constant as the number of firms increases
E)firms in the industry experience economies of scale

Question

Quizplus · Accepted Answer

In a constant-cost industry, as the number of firms increases, the demand for inputs remains constant, so the prices of inputs do not change. Therefore, the prices of its inputs remain constant as the number of firms increases.

If an Industry Is a Constant-Cost Industry