23. Consider the perfectly competitive firm and industry depicted in Figure 4. The industry was in long run equilibrium when demand for the good it produces increased causing the demand curve to shift from D₁ to D₂. In the short run:

1. There is no change in the output for the firm or the industry. As we know an increase in demand will always cause price and output to increase. The only change which doesn't affect output in the short run is a change in fixed costs.
2. Price and quantity produced increase for the firm and industry.
3. Output increases for the firm but falls for the industry. There isn't really a plausible short run way for this to occur in perfect competition.
4. Price decreases for the firm, but increase for the industry. The industry price is the same price for each firm in the industry so this makes no sense.
5. Price stays the same for the firm, but quantity decreases. The only way for this to happen is if variable costs shift for one firm but not for others.

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