If the expansion of output in an industry leads to unchanged resource prices, the industry is most likely to be a(n):
A) decreasing cost industry.
B) increasing cost industry.
C) constant cost industry.
D) industry characterized by economies of scale.

Question

Quizplus · Accepted Answer

A constant cost industry is one in which the expansion of output does not lead to changes in resource prices. This means that firms can increase production without facing higher costs for labor, raw materials or other resources. In a constant cost industry, firms can achieve economies of scale without facing diminishing returns or higher input costs.

If the Expansion of Output in an Industry Leads to Unchanged