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.