In the long run,if the input procurement prices increase as the output supplied by firms in an industry rises:
A)the firms are operating in an increasing-cost industry.
B)the firms' profit margins will increase.
C)the firms are making positive economic profits.
D)the firms' cost curves shift will downward.

Question

Quizplus · Accepted Answer

If the input procurement prices increase as the output supplied by firms in an industry rises, it indicates that the industry is facing increasing costs. This means that the firms' cost curves will shift upward, reducing their profit margins and making it difficult to maintain economic profits. Therefore, the best choice is A as it correctly makes this observation. Choices B and C are incorrect as they suggest an increase in profit margins or positive economic profits, which is not likely in an increasing-cost industry. Choice D is also incorrect as it suggests a downward shift in cost curves, which is not consistent with the situation described in the question.

In the Long Run,if the Input Procurement Prices Increase as the Output