A perfectly competitive, increasing cost industry is initially in long run equilibrium. Then, there is an increase in demand. Compared with the initial equilibrium, once the new long run equilibrium is reached:?

Question

Quizplus · Accepted Answer

In an increasing cost industry, an increase in demand leads to higher input costs as more firms enter the market, resulting in a higher equilibrium price and greater total output in the new long run equilibrium.

A Perfectly Competitive, Increasing Cost Industry Is Initially in Long