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

question 193

Multiple Choice

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

• A)It experiences no change from the original equilibrium
• B)It experiences a higher equilibrium price and produces less output
• C)It experiences a lower equilibrium price and produces less 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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