Long-Run Adjustment in a Constant-Cost Industry
In the long run, how does a firm in a constant-cost industry respond to an increase in market demand?
A
Decrease production to maintain higher prices and prevent possible excess supply.
B
Increase production along with other industries expanding output without a change in cost per unit.
C
Invest in high-tech innovations to reduce marginal costs and gain competitive advantage.
D
Ignore the change in demand assuming it will be absorbed by other competitors.
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