Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Production costs decrease
B
Production costs remain constant
C
Production costs increase
D
Production costs fluctuate randomly
Understanding the Answer
Let's break down why this is correct
Answer
In increasing cost industries, production costs usually rise as the amount of goods produced increases. This happens because, as companies try to produce more, they often face higher prices for the resources they need, like labor and raw materials. For example, a factory that makes toys might find that hiring extra workers becomes more expensive as it competes for labor in a tight job market. Additionally, they may need to invest in more expensive machinery or pay for overtime, which adds to their costs. Therefore, in these industries, the more you produce, the more it costs to make each additional unit.
Detailed Explanation
In increasing cost industries, as you make more products, the cost to produce each one goes up. Other options are incorrect because Some might think that making more products lowers costs; It's a common belief that costs stay the same when producing more.
Key Concepts
production costs
Topic
Increasing Cost Industries
Difficulty
easy level question
Cognitive Level
understand
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