If the gadget industry is a constant cost industry, one would expect that the long run result of an increase in demand for gadget to include ____ firms and a(n) ____ in price.

Question

Quizplus · Accepted Answer

In a constant cost industry, the entry of new firms in response to increased demand does not affect input prices, so the long-run supply curve is perfectly elastic. This means that while more firms enter the market, the price remains unchanged.

If the Gadget Industry Is a Constant Cost Industry, One