Suppose that, in the long run, the price of feature films rises as the movie production industry expands. We can conclude that movie production is a(n):
A) increasing-cost industry.
B) constant-cost industry.
C) decreasing-cost industry.
D) marginal-cost industry.

Question

Quizplus · Accepted Answer

If the price of feature films is rising as the movie production industry expands, it suggests that the cost of production is also rising. This is typical of an increasing-cost industry. As the industry expands, it becomes harder to find resources at the same price as before, leading to higher costs and higher prices for consumers.

Suppose That, in the Long Run, the Price of Feature