Question 32 What happens in an increasing cost industry in response to an increase in demand? firms exit and push costs downward until the new long run average cost curve's minimum point corresponds to the new, higher price. firms enter and push costs downward until the new long run average cost curve's minimum point corresponds to the new, lower price. firms starts to exit and output decreases until the price arrives at the new, higher price. firms enter and output increases until the price returns to its original level. firms enter and push costs upward until the new long run average cost curve's minimum point corresponds to the new, higher price.

Question 32 What happens in an increasing cost industry in response to an increase in demand? firms exit and push costs downward until the new long run average cost curve's minimum point corresponds to the new, higher price. firms enter and push costs downward until the new long run average cost curve's minimum point corresponds to the new, lower price. firms starts to exit and output decreases until the price arrives at the new, higher price. firms enter and output increases until the price returns to its original level. firms enter and push costs upward until the new long run average cost curve's minimum point corresponds to the new, higher price.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter11: The Firm: Production And Costs

Section: Chapter Questions

Problem 21P

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