Suppose, as a result of a long-run adjustment in a perfectly competitive industry to a change in demand, price and output both rose.Therefore, demand must have __________ in this __________ industry
A)fallen; increasing cost
B)fallen; decreasing cost
C)increased; increasing cost
D)increased; decreasing cost
E)decreased; constant cost

Question

Quizplus · Accepted Answer

In a perfectly competitive industry, if both price and output rise in the long run, it indicates that demand has increased in an increasing cost industry, where costs rise as industry output expands.

Suppose, as a Result of a Long-Run Adjustment in a Perfectly