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

question 209

Multiple Choice

Suppose a perfectly competitive constant-cost industry is in long-run equilibrium when market demand suddenly falls.What happens to the industry in the long run?

• A)It experiences no change form the original equilibrium
• B)It experiences a higher equilibrium price and produces more output
• C)It experiences a lower equilibrium price but produces more output
• D)It experiences the same equilibrium price but produces more output
• E)It experiences the same equilibrium price but produces less output

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Definitions:

Hidden Negatives

Subtle or indirect negative statements or implications in communication.

Negative

Expressing or suggesting a denial, refusal, or contradiction, or connoting something undesirable or harmful.

Positive Statement

A statement that confirms, affirms, or expresses a positive attitude or outcome.

Hidden Negatives

Subtle or disguised expressions of refusal or disapproval.