If Input Costs Remain the Same as Industry Output Expands,what

question 97

Multiple Choice

If input costs remain the same as industry output expands,what would you expect to be the long-run impact of an increase in demand on an industry currently in long-run equilibrium?

• A) There will be more firms but the price will remain the same.
• B) There will be fewer firms but the price will remain the same.
• C) There will be more firms and the price will increase.
• D) There will be fewer firms and the price will decrease.

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Definitions:

Economist's Commodity Price Index

An index measuring the price movement over time of a basket of commodities, used by economists to evaluate inflation or market trends in raw materials.

Productive Resources

Essential inputs used in the production of goods and services, including land, labor, capital, and entrepreneurship.

Present Value

Today’s value of some amount of money that is to be received sometime in the future.

User Cost

The opportunity cost of extracting and selling a nonrenewable natural resource today rather than waiting to extract and sell the resource in the future; the present value of the decline in future revenue that will occur because a nonrenewable natural resource is extracted and sold today rather than being extracted and sold in the future.