In a Competitive, Constant Cost Industry

question 184

Multiple Choice

In a competitive, constant cost industry:

• A) there is no entry or exit.
• B) demand never changes.
• C) supply is inelastic.
• D) the long-run price is constant.

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Definitions:

Capital Expenditure

Capital expenditure involves funds spent by a company to acquire or upgrade physical assets such as equipment, property, or industrial buildings.

Wages

Payments made to employees based on the amount of time worked or the level of output produced.

Output

The total amount of goods or services produced by a company, industry, or economy.

Prospective Sunk Costs

Future costs that, once incurred, cannot be recovered and should not influence current decision-making processes.