Assume that a decreasing-cost industry experiences an increase in demand. In the short run, this will

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In the short run, a demand increase in a decreasing-cost industry will cause a shortage of goods. This leads to an increase in price due to the limited availability of goods. As the industry expands in the long run, costs will decrease, leading to a decrease in price, but this will not happen immediately in the short run.

Assume That a Decreasing-Cost Industry Experiences an Increase in Demand