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

question 63

Multiple Choice

Assume a purely competitive decreasing-cost industry is initially in long-run equilibrium but then there is a decrease in market demand for the product. After all economic adjustments to this new situation have taken place, product price will be

• A)higher, but total output will be lower.
• B)lower, and total output will be lower.
• C)higher, and total output will be higher.
• D)lower, but total output will be higher.