📚 Learning Guide
Increasing Cost Industries
easy

In increasing cost industries, what typically happens to production costs as output increases?

Master this concept with our detailed explanation and step-by-step learning approach

Learning Path
Learning Path

Question & Answer
1
Understand Question
2
Review Options
3
Learn Explanation
4
Explore Topic

Choose 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

Ready to Master More Topics?

Join thousands of students using Seekh's interactive learning platform to excel in their studies with personalized practice and detailed explanations.