Suppose a Perfectly Competitive Constant-Cost Industry Is in Long-Run Equilibrium

question 139

Multiple Choice

Suppose a perfectly competitive constant-cost industry is in long-run equilibrium when market demand increases.What will probably happen to a firm in this industry in the long run?

• A)There will be no change in the equilibrium price.
• B)The equilibrium price will be higher in the long run.
• C)The equilibrium price will be lower in the long run.
• D)It will charge the same equilibrium price but will reduce its output.
• E)It will experience higher average total costs and will reduce its output.

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Definitions:

Anxiety

A feeling of worry, nervousness, or unease about something with an uncertain outcome.

Disgust

A strong sensation of aversion or repulsion, often elicited by unpleasant tastes, smells, or sights.

Venting

The act of expressing one's emotions freely to alleviate stress, often involving sharing frustrations.

Reduce Anger

To decrease the intensity of the emotion characterized by antagonism toward someone or something perceived as the cause of a grievance.