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

question 74

Multiple Choice

Assume a purely competitive increasing-cost industry is initially in long-run equilibrium and that an increase in consumer demand occurs. After all economic adjustments have been completed, product price will be

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

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