In an Increasing Cost Industry

question 172

Multiple Choice

In an increasing cost industry:

• A) above-normal profits are eliminated for all firms in the long run.
• B) above-normal profits are eliminated for only some firms in the long run.
• C) costs rise as output decreases.
• D) profits rise as output decreases.

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Definitions:

Product Market

The marketplace in which final goods or services are offered to consumers, businesses, and the public sector.

Book Value

The net value of a company's assets, as recorded on the balance sheet, minus liabilities and intangible assets like goodwill.

Source Of Cash

Refers to the origination of funds in a business, which could include operations, financing activities, or investment activities.

After-Tax

The amount of income or profit remaining after all taxes have been deducted.