Which of the Following Is Most Likely to Be an Increasing-Cost

question 89

Multiple Choice

Which of the following is most likely to be an increasing-cost industry?

• A)an industry whose firms experience diseconomies of scale
• B)an industry whose firms experience economies of scale
• C)an industry that is a major buyer in the markets for the inputs it uses
• D)an industry that is a very small buyer in the markets for the inputs it uses
• E)an industry in which the firms earn positive economic profit in the long run

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Definitions:

Shares Outstanding

The total number of a company's shares of stock that are owned by shareholders including those held by institutional investors and restricted shares held by insiders and company officers.

Market Price

The existing rate at which one can buy or sell an asset or service in the market.

Incremental Value

The additional value created by undertaking a specific action, project, or investment, compared to not doing so.

Shares Outstanding

The total number of shares that are currently owned by shareholders, including restricted shares owned by the company's officers and insiders as well as those held by the public.