If Input Prices for Perfectly Competitive Firms Increase as the Output

question 163

Multiple Choice

If input prices for perfectly competitive firms increase as the output of its industry expands:

• A) their short run average cost curves will shift up as the industry expands.
• B) after a permanent increase in demand, the long run equilibrium price will be higher than the original price.
• C) after a permanent increase in demand, the short run equilibrium price will be higher than the eventual long run equilibrium price.
• D) all of the above will be true.

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