In the Long Run,if the Input Procurement Prices Increase as the Output

question 33

Multiple Choice

In the long run,if the input procurement prices increase as the output supplied by firms in an industry rises:

• A)the firms are operating in an increasing-cost industry.
• B)the firms' profit margins will increase.
• C)the firms are making positive economic profits.
• D)the firms' cost curves shift will downward.

---

Definitions:

Perfectly Competitive Industry

Describes a market structure where many firms sell identical products, entry and exit are easy, and no single buyer or seller has control over prices.

Variable Input

An input whose quantity the firm can vary at any time (for example, labor).

Long-Run Equilibrium

A state where all factors of production are variable, leading to the optimal distribution of resources in the market.

Demand Curve

A chart that illustrates the link between a product's cost and the amount of the product consumers want to buy at those prices.