If input costs remain the same as industry output expands, what would you expect to be the long-run impact of an increase in demand on an industry currently in long-run equilibrium?

Question

Quizplus · Accepted Answer

In the long-run, an increase in demand leads to more firms entering the industry to take advantage of the higher demand, assuming input costs remain constant. This expansion in industry output will eventually bring the price back to its original equilibrium level, as the increase in supply matches the increase in demand.

If Input Costs Remain the Same as Industry Output Expands