Final answer:
An increasing cost is a cost that remains constant up to a certain level of output and then increases as production expands beyond that point, often due to the need for more expensive inputs or additional investment.
Step-by-step explanation:
The term for a cost that remains constant for a range of output and then increases to a higher level is known as an increasing cost. In the scenario described, this typically occurs when a firm is operating at full capacity and must invest in additional resources to increase production. Initially, costs remain constant as output increases, but beyond a certain point, additional inputs or resources become necessary, and these may be more expensive, leading to a step-up in costs.
Using Figure 8.8 as a reference, we can see that in case (b), there is an indication of increasing cost conditions. As the demand increases, the supply cannot increase proportionately due to scarcity of inputs or rising wages, leading to a higher equilibrium price. This indicates that costs are increasing as output increases, reinforcing the definition of increasing costs.