An increasing-cost industry will have

Question

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In an increasing-cost industry, as production increases and the industry grows, the cost of inputs and factors of production also increase, leading to higher production costs for firms. As a result, in the long run, firms will require higher prices to cover their increased costs and maintain profitability. This results in an upward sloping supply curve in the long run. Choice A is incorrect because a perfectly elastic supply curve implies that firms can produce any quantity at the given price, which is unlikely in an increasing-cost industry. Choice B is incorrect because a perfectly inelastic supply curve would imply that firms cannot adjust their production in response to changes in price or market conditions, which is again unlikely in an industry with increasing costs. Choice D is incorrect because an upward sloping demand curve would imply that as the price increases, the quantity demanded also increases, which is not a typical characteristic of demand.

An Increasing-Cost Industry Will Have