Suppose that a firm in an industry subject to diminishing returns to scale is initially in long run equilibrium.Which of the following will not be part of the industry adjustment process to a permanent increase in demand?
A) Some firms will temporarily make economic profits.
B) Some new firms will enter.
C) The price will temporarily rise.
D) The long run equilibrium price will be higher than the initial equilibrium price.
E) All of the above will be consequences.
Correct Answer:
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