Which of the Following Best Describes Constant Cost Industries

question 67

Multiple Choice

Which of the following best describes constant cost industries?

• A) They significantly increase the demand for inputs when expanding output, and, as a result, input prices rise.
• B) They do not use inputs in sufficient quantities that a change in industry output would affect the prices of the inputs.
• C) They use large portions of the total supply of specialized resources.
• D) They are those in which the cost curves of individual firms shift upwards as industry output expands.

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Definitions:

Equally-Weighted Portfolio

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Securities that signify either an equity stake in a corporation that is publicly traded, a debt interest in a company or government entity, or ownership rights as delineated by an option.

HML Beta

A measure used in finance to assess the sensitivity of an asset or portfolio to a value factor, defined as high minus low book-to-market stocks.

SMB Beta

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