Assume a purely competitive increasing-cost industry is initially in long-run equilibrium and that an increase in consumer demand occurs.After all economic adjustments have been completed,product price will be:

A) lower,but total output will be larger than originally.
B) higher and total output will be larger than originally.
C) lower and total output will be smaller than originally.
D) higher,but total output will be smaller than originally.

An increase in consumer demand will result in an increase in market price and quantity demanded in the short run. In the long run, firms will enter the industry to take advantage of the higher price, causing an increase in market supply and a reduction in the price. However, since this is an increasing-cost industry, the entry of new firms will lead to higher costs of production, causing the long-run market supply curve to be upward-sloping. As a result, the final equilibrium price will be higher than the original long-run equilibrium price, but the total output will also be larger than originally.