Suppose a perfectly competitive industry is in long- run equilibrium.A new one- time cost- saving technology is then developed and new plants are built.Eventually,a new long- run equilibrium will be established where

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Once all plants adopt the new cost-saving technology, they will be able to produce at lower costs, leading to a higher market output in the long run. This will cause the industry supply curve to shift to the right, resulting in a new equilibrium with higher market output but the same or possibly even lower prices. B, D, and E are not correct because they assume some firms will continue to produce at higher costs, which would ultimately lead to inefficiencies and exit from the industry.

Suppose a Perfectly Competitive Industry Is in Long- Run Equilibrium