Purely Competitive Industry X Has Constant Costs and Its Product

question 15

Multiple Choice

Purely competitive industry X has constant costs and its product is an inferior good.The industry is currently in long-run equilibrium.The economy now goes into a recession and average incomes decline.The result will be

• A)an increase in output and in the price of the product.
• B)an increase in output, but not in the price, of the product.
• C)a decrease in the output, but not in the price, of the product.
• D)a decrease in output and in the price of the product.

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