An increasing-cost industry is one in which the average cost of production ________ as the total output of the industry ________.

Question

Quizplus · Accepted Answer

In an increasing-cost industry, due to limited resources, as the total output of the industry increases, the cost of production per unit increases as well. This may be due to factors such as scarcity of raw materials or limited availability of skilled labor. As a result, the average cost of production increases as the industry expands, leading to higher prices for consumers. Option A correctly describes this relationship between the average cost of production and total output in an increasing-cost industry.

An Increasing-Cost Industry Is One in Which the Average Cost