A Constant-Cost Industry Is Characterized by

question 12

Multiple Choice

A constant-cost industry is characterized by

• A)an upward-sloping long-run supply curve.
• B)a downward-sloping long-run supply curve.
• C)a perfectly elastic long-run supply curve.
• D)perfectly elastic short-run and long-run supply curves.
• E)a perfectly elastic short-run supply curve and an upward-sloping long-run supply curve.

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Definitions:

Manufacturing Overhead

The indirect factory-related costs that are not directly tied to a specific product.

Cost per Unit

The total cost associated with producing one unit of a product, including both fixed and variable costs.

Variable Costs

Expenses that change in proportion to the level of production or business activity, including costs such as materials and direct labor.

Fixed Costs

Fixed outgoings that are unaffected by variations in output or sales volume, including rental fees, payroll, and insurance coverages.