Assume That a Decline in Consumer Demand Occurs in a Purely

question 23

Multiple Choice

Assume that a decline in consumer demand occurs in a purely competitive industry that is initially in long-run equilibrium. We can

• A) predict that the new price will be greater than the original price.
• B) predict that the new price will be less than the original price.
• C) predict that the new price will be the same as the original price.
• D) not compare the original and the new prices without knowing what cost conditions exist in the industry.