If the entry or exit of firms does not affect the resource prices in an industry, we refer to it as a
A)fixed-price industry.
B)price-controlled industry.
C)constant-cost industry.
D)price-taking industry.

Question

Quizplus · Accepted Answer

In a constant-cost industry, the entry or exit of firms does not affect the prices of resources, meaning that the cost of production remains constant even as the industry size changes. This is because the supply of resources is perfectly elastic, accommodating any change in demand from the industry without changing the price.

If the Entry or Exit of Firms Does Not Affect