Recall the Application about the demand and price for margarine to answer the following question(s).
-Recall the Application. The reason that the change in demand for margarine did not change the equilibrium price in the long run is because the margarine industry is an example of ________ industry.

Question

Quizplus · Accepted Answer

In a constant-cost industry, the cost of producing each unit does not change as the industry expands or contracts. Therefore, even if the demand for margarine changes, the equilibrium price remains the same because the cost of producing each unit of margarine remains constant. This is why the change in demand did not affect the equilibrium price in the long run.

Recall the Application About the Demand and Price for Margarine