Asked by Ashley Menominee on Jun 29, 2024
Verified
Suppose an increase in product demand occurs in a decreasing-cost industry. As a result,
A) the new long-run equilibrium price will be lower than the original long-run equilibrium price.
B) equilibrium quantity will decline.
C) firms will eventually leave the industry.
D) the new long-run equilibrium price will be higher than the original price.
Decreasing-cost Industry
An industry where average costs of production decrease as the scale of output increases.
Long-run Equilibrium Price
The price at which the quantity of a good demanded equals the quantity supplied, with all adjustments made for factors affecting supply or demand over time.
Product Demand
The desire and willingness of consumers to purchase a particular product at various prices during a certain period.
- Examine the impact of alterations in consumer preferences on the market value and production across various competitive sectors.
- Recognize the role of technology and economies of scale in shaping industry costs and market prices.
Verified Answer
Learning Objectives
- Examine the impact of alterations in consumer preferences on the market value and production across various competitive sectors.
- Recognize the role of technology and economies of scale in shaping industry costs and market prices.
Related questions
When LCD Televisions First Came on the Market, They Sold ...
Assume a Purely Competitive Increasing-Cost Industry Is Initially in Long-Run ...
Suppose an Increase in Product Demand Occurs in a Decreasing-Cost ...
Purely Competitive Industry X Has Constant Costs and Its Product ...
A Local Retailer Has Decided to Carry a Well-Known Brand ...