a constant cost industry is more likely to arise in a market where course hero

by Rudy Casper Published 2 years ago Updated 1 year ago 6 min read

What is a constant cost industry?

A constant cost industry is an industry where each firm's costs aren't impacted by the entry or exit of new firms.

What is a good example of a constant cost industry?

Examples of constant-cost industries are the pencil industry and internet storage space. As more companies enter the pencil industry, the demand for wood to produce pencils increases. However, because the pencil industry covers a small portion of wood demand, the price of timber is unchanged.Apr 13, 2022

What is a constant cost perfectly competitive industry?

CONSTANT-COST INDUSTRY: A perfectly competitive industry with a horizontal long-run industry supply curve that results because expansion of the industry causes no change in production cost or resource prices.

Under what conditions would an increase in demand lead to a lower long run equilibrium price?

Under what conditions would an increase in demand lead to a lower long-run equilibrium price? The firms in the market are part of a decreasing-cost industry. In a decreasing-cost industry: lower demand leads to higher long-run equilibrium prices.

What is constant cost industry and increasing-cost industry?

In a constant-cost industry, exit will not affect the input prices of remaining firms. In an increasing-cost industry, exit will reduce the input prices of remaining firms. And, in a decreasing-cost industry, input prices may rise with the exit of existing firms.

What is a constant cost industry quizlet?

A constant-cost industry is one in which: resource prices remain unchanged as output is increased. An increasing-cost industry is associated with: an upsloping long-run supply curve.

Which of the following markets is most likely to be a perfectly competitive market?

Fast food industry and clothing industry are most likely to be perfectly competitive because a perfectly competitive market is an organized market with the liberty of free entry and exits of firms, and both the sellers and buyers have perfect knowledge about the market and prevailing prices.

What is an increasing cost industry?

In an increasing-cost industry, the long-run industry supply curve is upward-sloping. The industry produces more output, but only at a higher price needed to compensate for the increase in input costs.

When a firm is in a constant cost industry a decrease in demand will result in economic?

When a firm is in a constant-cost industry, a decrease in demand will result in economic losses.

What is a decreasing cost industry?

A decreasing cost industry is one that is distinguished by its long run supply curve being downward sloping. In this case, when an increase in market demand spurs extra output to meet that demand, product prices will tend to fall because of falling costs of production.

When a firm is in an increasing cost industry an increase in demand will result in economic?

Yes, because those two can claim a larger market share. When a firm is in an increasing-cost industry, an increase in demand will result in economic profits Correct . This will cause entry into Correct the industry, resulting in an increase Correct in supply over time.

Which of the following does a decreasing cost industry experience?

Which of the following does a decreasing-cost industry experience? Lower costs as industry output expands. Which type of market produces the most efficient use of society's resources?