Exhibit 8-19 Long-run perfectly competitive industry

As shown in Exhibit 8-19, assume that a perfectly competitive industry is in long-run equilibrium at point A and the demand curve shifts from D₁ to D₂. The result is a long-run supply curve drawn from point:

Question

Exhibit 8-19 Long-run perfectly competitive industry

As shown in Exhibit 8-19, assume that a perfectly competitive industry is in long-run equilibrium at point A and the demand curve shifts from D₁ to D₂. The result is a long-run supply curve drawn from point:

Quizplus · Accepted Answer

When the demand curve shifts from DS1U1B11S1U1B0 to DS1U1B12S1U1B0, the new equilibrium point will be at point C. In the long run, firms will enter the market, and as a result, the supply curve will shift to the right, from S1U1B0 to S2U2B0. This new supply curve will pass through point A and point C, so the long-run supply curve drawn from point A will extend to point C. Therefore, the correct choice is D, A to point C.

Exhibit 8-19 Long-Run Perfectly Competitive Industry