Question

If factor prices and factor quantities move in the same direction we have

a. A constant cost industry b. A decreasing cost industry

c. An increasing cost industry d. Inadequate data to tell precisely what will happen​

Answer 1

Answer:

An increasing cost Industry

Explanation:

Answer 2

If factor prices and factor quantities move in the same direction we have

a. A constant cost industry b. A decreasing cost industry

c. An increasing cost industry d. Inadequate data to tell precisely what will happen​

The correct answer is :

c. An increasing cost industry

Explanation :

If factor prices and factor quantities move in the same direction we have an increasing cost industry.

If factor price and factor quantity move in the same direction, it is a sign of a  increasing cost industry.

Increasing cost industry refers to the kind of industry whose output level continues to increase. That is, if the factor price and factor quantity increase, the average cost also increases.

The scale of the increasing cost industry is based on external anomalies. As prices increase with the effect of external factors, the average cost of production also increases. Many companies enter this type of industry in search of more economic benefits, as they get faster profits in this industry.

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