Final answer:
A constant stock level that maintains stockage at a constant level is associated with a constant cost scenario. The equilibrium price remains the same as quantity sold increases when supply matches the rise in demand.
Step-by-step explanation:
The type of adjusted stock level that maintains an item's stockage position at a constant level is associated with a constant cost. This scenario is depicted in part (a) of the given information, where an increase in demand is met with an equal increase in supply.
As a result, the equilibrium price remains unchanged while the quantity sold increases. By contrast, in an increasing cost scenario (b), the supply does not rise as much as demand, leading to a higher equilibrium price. In the decreasing cost scenario (c), new technology or economies of scale enable a significant increase in supply in response to demand, causing the equilibrium price to decline.
The type of adjusted stock level that maintains an item's stockage position at a constant level is constant cost. In a constant-cost industry, the supply increase is equal to the demand increase, resulting in a constant equilibrium price as the quantity sold increases. This means that sellers are able to meet the increased demand without a significant change in price.