The Long-Run Adjustment and Industry Types

Whenever there are expansions in an industry, costs of production for the existing and new firms could either

stay the same, increase, or even decrease. Therefore, we can categorize an industry as being (1) a constant-cost

industry (as demand increases, the cost of production for firms stays the same), (2) an increasing cost industry
(as demand increases, the cost of production for firms increases), or (3) a decreasing cost industry (as demand

increases the costs of production for the firms decreases).

For a constant-cost industry, whenever there is an increase in market demand and price, then the supply

curve shifts to the right with new firms’ entry and stops at the point where the new long-run equilibrium

intersects at the same market price as before. This is the case of constant returns to scale, which we discussed

earlier in the chapter on Production, Costs, and Industry Structure. However, why will costs remain the same?
{"total_pages": 597, "upload_timestamp": "2026-02-07T15:24:38.309401", "file_type": ".pdf", "creator": "PDFMiner", "file_name": "Microeconomics3e.pdf", "creationdate": "2022-12-07T14:15:44-06:00", "source_file": "downloads\\business\\economics\\Microeconomics3e.pdf", "moddate": "2022-12-07T14:23:05-06:00", "file_size_mb": 26.99, "uploaded_via": "batch_uploader", "file_hash": "830b81f41611ac67a490444dbb5d6aed292224606965b06965b914443c93331a", "source": "downloads\\business\\economics\\Microeconomics3e.pdf", "batch_upload": true, "producer": "Prince 14.2 (www.princexml.com)", "title": "Principles of Microeconomics 3e"}