Which of the Following Is True of a Constant Cost

question 22

Multiple Choice

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

• A)Along the industry's long-run supply curve,firms in the industry earn a positive economic profit.
• B)The long-run supply curve for a constant cost industry is horizontal.
• C)The industry's long-run supply curve is derived by horizontally summing the long-run supply curves of the individual firms.
• D)In the long run,the industry experiences an increase in the price of inputs.

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Definitions:

Common Stock

A type of equity security that represents ownership in a corporation, entitling the holder to vote at shareholder meetings and to receive dividends.

Dividend Payout Ratio

A financial ratio that shows the percentage of a company's earnings paid out as dividends to shareholders.

Dividend Reinvestment Plans

Programs offered by corporations allowing investors to automatically reinvest dividends paid out by the stock into additional shares, potentially increasing their holdings over time.

New Stock

Shares that are issued for the first time by a company to the public in the primary market.