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

question 117

Multiple Choice

Assume a purely competitive increasing-cost industry is in long-run equilibrium. If a decline in demand occurs, firms will

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

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Definitions:

Mastitis

Inflammation of the breast tissue, often associated with infection and lactation.

Influenza

A highly contagious viral infection of the respiratory passages causing fever, severe aching, and catarrh, and often occurring in epidemics.

Fever

An elevated body temperature, often a sign of infection or illness.

Peau D'orange

A term describing skin that looks dimpled or puckered, resembling the surface of an orange, commonly associated with inflammatory breast cancer.