Question

The owner of a clothing factory wants to make more winter coats. According to the law of increasing costs, what will happen next?

A. The factory owner will have to give something up to make more coats.

B. The cost of making winter coats will stay the same.

C. The opportunity to make winter hats goes up.

D. The factory owner will need fewer resources to make more coats

Answer 1

The correct answer is A. The factory owner will have to give something up to make more coats.

That is because he will have to reallocate resources in order to have enough to keep production based on the supply and demand trends.