Which of the Following Is True for a Constant Cost

question 65

Multiple Choice

Which of the following is true for a constant cost industry?

• A) It uses a relatively large share of available resource inputs.
• B) It uses a relatively small share of available resource inputs.
• C) Industry expansion will put upward pressure on wages and/or other input prices.
• D) Both a. and c.

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Definitions:

Appreciated

An increase in the value of an asset or currency over time, typically due to market dynamics such as demand and supply.

Depreciated

A decrease in the value of an asset over time, typically due to wear and tear or obsolescence.

Inflation

The pace of escalation in the overall price environment for goods and services, lessening the ability to procure.

Real Exchange Rate

A measure of the value of one country's currency compared to another's, adjusted for inflation, reflecting the purchasing power of the currencies for goods and services.