If an Industry's Long-Run Per-Unit Costs Decrease as Its Output

question 304

Multiple Choice

If an industry's long-run per-unit costs decrease as its output increases then

• A) the firm's long-run economic profits must be less than zero.
• B) the firm is most likely a decreasing-cost industry.
• C) the firm is most likely an increasing-cost industry.
• D) the firm is most likely a constant-cost industry.

---

Definitions:

Pay Flexibility

The ability of an employer to adjust wages based on performance, market conditions, or other factors.

Seniority-Based

A system where decisions regarding layoffs, promotions, and other job-related benefits are made based on the length of time an employee has worked at an organization.

Merit Bonuses

Compensation rewards given to employees based on their performance, as a way to incentivize higher productivity or achievement of certain goals.

Skill-Based Pay

A compensation system that bases employee pay on the skills and knowledge they possess, rather than their job position or title.