Suppose a perfectly competitive increasing-cost industry is in long-run equilibrium when market demand increases.Which of the following statements is true in this case?
A) Existing firms will earn economic profits in the new long-run equilibrium.
B) Existing firms will decrease output in the short run.
C) New firms will enter the industry in the short run.
D) Some resource suppliers to the industry will earn higher income.
E) The new long-run equilibrium price will be lower than the original equilibrium price.
Correct Answer:
Verified
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