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

An increasing-cost industry is one where, as output expands, the costs of production for firms also increase. This leads to an upsloping long-run supply curve because firms will only supply more at higher prices to cover the increased costs.

An Increasing-Cost Industry Is Associated with