25. Again referring to Figure 4, the new long run equilibrium will differ from the original long
run equilibrium in that:
- The firm and the industry will produce at the same level as before.
Because supply shifted out, it is clear that the industry must be
producing more output than before. Though, as we can see, the individual
firms who were in the industry in the initial equilibrium are
back to producing the original level of output.
- The firm and the industry will produce more at a higher price.
Because there was an increase in demand, market price returned to
its original level.
- The firm and the industry will produce less at a lower price.
Because there was an increase in demand, market price returned to
its original level.
- The firm will produce at the same level at the original price
while the industry will produce more at the original price.
- The firm will produce less at the original price, while the industry
will produce more at the original price. While it is true that the price will be the same as the original,
and it is also true that the industry will produce more, it is
not correct that the firm will produce less.
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