In an increasing cost industry,as output increases:
A)firms' cost curves shift downward.
B)input prices increase.
C)profit per unit increases.
D)the price of the product in the market increases.

Question

Quizplus · Accepted Answer

In an increasing cost industry, as output increases, input prices increase. This leads to higher costs for firms and a higher price for the product in the market. This is because the industry is experiencing a scarcity of resources or inputs, making them more expensive to acquire as output increases. The cost curves for firms may shift upward rather than downward. Profit per unit may remain the same or decrease as costs increase.

In an Increasing Cost Industry,as Output Increases