Exhibit 23-9

-Refer to Exhibit 23-9.Assume that demand increases from D₁ to D₂; in the new long run equilibrium,price settles at a level between P₁ and P₂This means that the industry in question is a(n) __________-cost industry.

Question

Exhibit 23-9
Exhibit 23-9 -Refer to Exhibit 23-9.Assume that demand increases from D1 to D2; in the new long run equilibrium,price settles at a level between P1 and P2 This means that the industry in question is a(n) __________-cost industry. A) decreasing B) increasing C) constant D) marginal E) low

Exhibit 23-9 -Refer to Exhibit 23-9.Assume that demand increases from D<sub>1</sub> to D<sub>2</sub>; in the new long run equilibrium,price settles at a level between P<sub>1</sub> and P<sub>2 </sub>This means that the industry in question is a(n) __________-cost industry. A) decreasing B) increasing C) constant D) marginal E) low

-Refer to Exhibit 23-9.Assume that demand increases from D₁ to D₂; in the new long run equilibrium,price settles at a level between P₁ and P₂This means that the industry in question is a(n) __________-cost industry.

Quizplus · Accepted Answer

In a increasing-cost industry, an increase in demand will lead to an increase in the prices of the inputs that the industry uses in production, leading to higher costs and higher prices in the long run equilibrium. Since the new equilibrium price is between P₁ and P₂, this indicates that the industry is experiencing higher costs in the long run equilibrium, suggesting that it is an increasing-cost industry.

Exhibit 23-9 -Refer to Exhibit 23-9.Assume That Demand Increases from D1 to Increases

Exhibit 23-9 -Refer to Exhibit 23-9.Assume That Demand Increases from D₁ to Increases