An industry in which an increase in industry output is accompanied by an increase in long-run per-unit costs is a(n)

Question

Quizplus · Accepted Answer

In an increasing-cost industry, as the industry output increases, the cost of inputs used in production increases, leading to an increase in long-run per-unit costs. This could be due to several factors such as scarcity of resources, limited availability of skilled labor, or diseconomies of scale. Therefore, option A is the correct answer. Option B, constant-cost industry, implies that the long-run per-unit costs remain constant even with an increase in industry output, which is unlikely. Option C, break-even cost industry, does not reflect the relationship between industry output and long-run per-unit costs. Option D, decreasing-cost industry, is the opposite of an increasing-cost industry, where an increase in industry output leads to a decrease in long-run per-unit costs, which is also unlikely.

An Industry in Which an Increase in Industry Output Is