In a constant-cost industry, an increase in output that increases the demand for resources used by the industry
A) is likely to result in higher prices for at least some resources.
B) causes the firm's cost curves to shift downward.
C) causes the demand curve for the industry to rise.
D) is not likely to result in higher prices for resources.

Question

Quizplus · Accepted Answer

In a constant-cost industry, resource prices remain unchanged as industry output changes, so an increase in output does not lead to higher resource prices.

In a Constant-Cost Industry, an Increase in Output That Increases