In an Increasing-Cost Industry, Expansion of Output

question 19

Multiple Choice

In an increasing-cost industry, expansion of output:

• A) causes input prices to rise as demand for them grows.
• B) leaves input prices constant as input demand grows.
• C) causes economies of scale to occur.
• D) occurs under conditions of increasing returns to scale.
• E) occurs without diminishing marginal product.

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Definitions:

Critical Distance

The ability to objectively analyze and evaluate a subject, allowing for a clear and unbiased perspective.

Georg Simmel

A German sociologist and philosopher known for his contributions to social theory and the analysis of modern urban life.

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