An increasing-cost industry is associated with
A) a perfectly elastic long-run supply curve.
B) an upsloping long-run supply curve.
C) a perfectly inelastic long-run supply curve.
D) an upsloping long-run demand curve.

Question

Quizplus · Accepted Answer

In an increasing-cost industry, as the industry expands in the long run, the cost of producing each unit increases due to the higher cost of resources or factors of production. This leads to an upward sloping long-run supply curve because producers will only be willing to supply more units at a higher price. The other choices are not applicable to this type of industry.

An Increasing-Cost Industry Is Associated with