After an increasing cost industry responds to an increase in demand,in the long run the equilibrium price will be ______ than before the demand increase.

Question

Quizplus · Accepted Answer

An increasing cost industry faces higher costs as it increases production, so in the long run, the only way to increase supply and meet demand is by raising the price. Therefore, the equilibrium price will be higher than before the increase in demand.

After an Increasing Cost Industry Responds to an Increase in Demand,in