Assume a Purely Competitive Decreasing-Cost Industry Is in Long-Run Equilibrium

question 221

Multiple Choice

Assume a purely competitive decreasing-cost industry is in long-run equilibrium. If an increase in demand occurs, firms will

• A)enter the industry, price will rise, and quantity produced will fall.
• B)leave the industry and price and quantity will both fall.
• C)enter the industry and price and quantity will both rise.
• D)enter the industry, price will fall, and quantity produced will rise.

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Definitions:

Pancreatitis

An inflammation of the pancreas, often caused by gallstones or excessive alcohol consumption, leading to abdominal pain.

Appendicitis

Inflammation of the appendix, a small pouch attached to the large intestine, which can become a medical emergency if not treated.

Type 2 Diabetes

A chronic condition characterized by insulin resistance or deficiency, leading to elevated glucose levels in the blood.

Retina

The light-sensitive layer at the back of the eye that captures images and sends them to the brain through the optic nerve.