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Industry supply turns out to be simply the sum of the firm supplies, just as
we learned in the section on Entry (Demand & Supply). Industry demand is simply the total
market demand for the product. It also turns out to be the sum
of the individual demands for the product.
At the industry level, equilibrium price changes in exactly
the ways we learned in our simple supply and demand models. If
supply increases, market price falls and quantity increases. What
remains here is to learn what happens within the individual firms
(within the industry), and what happens to the number of firms within
the industry.
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