In an increasing total cost industry, as firms enter the market, average total cost generally _____, and output _____.

Question

Quizplus · Accepted Answer

In an increasing total cost industry, as more firms enter the market, the costs of production inputs tend to rise due to increased demand for these inputs, leading to an increase in average total costs. Additionally, as more firms enter, the total output in the market also increases.

In an Increasing Total Cost Industry, as Firms Enter the Market