Rising prices per unit signal inflation Steps:

• Calculate price per unit: Year 1 = $10/10 units =$1; Year 2 = $25/21 units ≈$1.19; Year 3 = $40/32 units =$1.25.
• Observe prices rising from $1 to$1.25 over three years.
• Note physical output (units) increased from 10 to 32, but value rose faster (10 to 40), due to higher unit prices.
• Conclude the price increase indicates inflation in the industry.

Why B is correct:

• Inflation is a rise in the price level; the data shows unit prices increasing by 25% overall, directly evidencing inflation.

Why the others are wrong:

• A: Labor productivity (units per worker) rose from 2 to 4, but the table's value increase points more clearly to price effects than pure productivity gains.
• C: No cost or revenue data provided to calculate profit.
• D: Employed in this industry rose from 5 to 8, but working population refers to the broader labor force, with no total data given.

Final answer: B