If the entry or exit of firms does not affect the resource prices in an industry, we refer to it as a
A) fixed-price industry.
B) price-controlled industry.
C) constant-cost industry.
D) price-taking industry.

Question

Quizplus · Accepted Answer

In a constant-cost industry, the entry or exit of firms does not affect the prices of resources because the industry's demand for resources is small relative to the total market demand.

If the Entry or Exit of Firms Does Not Affect