Good Z is produced and sold in a competitive industry,and long-run industry supply is characterized by constant costs.The figure below shows a typical long-run average cost curve (LAC) for each of the firms producing good Z.LAC reaches its minimum unit cost of $12 and 1,000 units of output (point M) .Suppose the demand for good Z is Qd = 52,000 - 1,000P.
In long-run competitive equilibrium,if demand for good Z decreases,then LMC ___________ (falls,rises,stays the same) ,LAC ___________ (falls,rises,stays the same) ,and economic profit ___________ (falls,rises,stays the same) .
A) falls; falls; falls
B) falls; falls; remains the same.
C) remains the same; falls; falls.
D) remains the same; falls; remains the same.
E) remains the same; remains the same; remains the same
Correct Answer:
Verified
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