What Condition Is Necessary in a Constant Cost Industry

question 74

Multiple Choice

What condition is necessary in a constant cost industry?

• A) Prices of the industry's inputs do not change as the industry expands.
• B) Prices of the industry's inputs decline as the industry expands.
• C) Prices of the industry's inputs rise as the industry expands.
• D) There are barriers that prevent new firms from entering such an industry.

---

Definitions:

Situational Analysis

The process of evaluating an organization's current situation or environment to identify strengths, weaknesses, opportunities, and threats.

Forecasting

The process of making predictions about future events based on analysis of historical and current data.

Nonprogrammed Decision Making

A decision-making process that deals with unique, non-routine, and complex problems requiring creative solutions.

Escalation of Commitment

The phenomenon where individuals or organizations continue to invest in a decision despite evidence of its ineffectiveness, often to justify previous investments.