Suppose a Perfectly Competitive Constant-Cost Industry Is in Long-Run Equilibrium

question 209

Multiple Choice

Suppose a perfectly competitive constant-cost industry is in long-run equilibrium when market demand suddenly falls.What happens to the industry in the long run?

• A)It experiences no change form the original equilibrium
• B)It experiences a higher equilibrium price and produces more output
• C)It experiences a lower equilibrium price but produces more output
• D)It experiences the same equilibrium price but produces more output
• E)It experiences the same equilibrium price but produces less output