1. Suppose a purely competitive, increasing-cost industry is in long-run equilibrium. Now assume that a decrease in consumer demand occurs. After all resulting adjustments have been completed, the new equilibrium price:
A. and industry output will be less than the initial price and output.
2. Which of the following statements is correct?
A. The long-run supply curve for a purely competitive increasing-cost industry will be upsloping.
3. A constant-cost industry is one in which:
B. if 100 units can be produced for $100, then 150 can be produced for $150, 200 for $200, and so forth.
4. Which of the following will not hold true for a competitive firm in long-run equilibrium?
A. P equals AFC
5. 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:
B. higher and total output will be larger than originally.
6. Assume a purely competitive, increasing-cost industry is in long-run equilibrium. If a decline in demand occurs, firms will:
D. leave the industry and price and output will both decline.