A Constant-Cost Industry

question 103

Multiple Choice

A constant-cost industry

• A) is one in which an increase in demand is matched by a proportional increases in long-run supply.
• B) generates increasing profits whenever demand increases because the new long-run equilibrium price is above the old price even though average costs have not changed.
• C) has a horizontal long-run supply curve.
• D) has a downward sloping long-run supply curve.

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