A Constant-Cost Industry Is an Industry in Which

question 112

Multiple Choice

A constant-cost industry is an industry in which

• A)average costs fall as the industry expands output.
• B)average costs rise as the industry expands output.
• C)average costs remain constant as the industry expands output.
• D)input prices rise at a constant rate as firms in the industry use more inputs.

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Definitions:

Semiannually

Occurring or calculated twice a year, typically used in the context of bond interest payments or other financial assessments.

Market Rate of Interest

The prevailing rate of interest available in the market for investments of comparable risk and term.

Bond Indenture

A legal contract outlining the terms and conditions between the bond issuer and the bondholders.

Convertible Feature

A characteristic of some bonds or preferred stocks that allows them to be converted into a specified number of common shares, usually at the discretion of the holder.