a. Explain the difference between a constant-cost industry and an increasing-cost industry. b. Distinguish between the long-run impact of an increase of market demand in a constant-cost industry and the impact in an increasing-cost industry. S1= constant cost; S2= increasing cost a. A constant-cost industry uses such a small portion of the resources available that increasing output does not increase resource prices. The long-run average cost curve does not shift up or down as industry output changes. In an increasing-cost industry, the entry of new firms drives up resource prices and increases average production costs. Therefore, each firm’s average total cost curve rises, and the price that provides a normal profit rises.