Which of the following is true for a constant cost industry?
A) The total cost of producing 500 units will be the same as the total cost of producing 250 units.
B) If 100 units can be produced for $500, then 200 units can be produced for $1,000.
C) The demand curve and, therefore, the unit price in the industry are constant.
D) Firms in the industry will hold output constant if the price of the product increases.

Question

Quizplus · Accepted Answer

In a constant cost industry, the cost per unit remains the same as output increases. Therefore, if 100 units cost $500, 200 units would cost $1,000, maintaining the same cost per unit.

Which of the Following Is True for a Constant Cost