If the demand for a product increases in an increasing cost industry, as the market adjusts in the long run,
A) price will rise.
B) the firm's per-unit costs will increase.
C) the firm's per-unit costs will fall.
D) the market price will return to its initial position.

Question

Quizplus · Accepted Answer

In an increasing cost industry, as demand increases, input prices rise due to higher demand for resources, leading to higher per-unit costs for firms.

If the Demand for a Product Increases in an Increasing