If a Competitive Industry Is Characterized by Increasing Cost,which of the Following

question 17

Multiple Choice

If a competitive industry is characterized by increasing cost,which of the following will occur in response to an unexpected increase in demand?

• A)New firms will enter the industry.
• B)Economic profit will remain zero.
• C)Input prices will remain constant.
• D)The price of the product will remain unchanged.

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Definitions:

Maturity Period

The duration or lifetime until a financial instrument, such as a bond or loan, is due to be repaid in full.

Interest Rates

The cost of borrowing money, typically expressed as a percentage of the total amount loaned.

Spin-Offs

The creation of an independent company through the sale or distribution of new shares of an existing business or division of a parent company.