Business, 19.12.2019 06:31 theamandawhite

Aconstant cost, perfectly competitive market is in long-run equilibrium. at present, there are1,000 firms each producing 400 units of output. the price of the good is $60. now suppose there isa sudden increase in demand for the industryʹs product which causes the price of the good to riseto $64. in the new long-run equilibrium, how will the average total cost of producing the goodcompare to what it was before the price of the good rose?

a) the average total cost will be higher than it was before the price increase because ofdiseconomies of scale arising from the increased demand.
b) the average total cost will be lower than it was before the price increase because ofeconomies of scale.
c) the average total cost will be the same as it was before the price increase.
d) the average total cost will be higher than it was before the price increase since the increase indemand will drive up input prices.

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Aconstant cost, perfectly competitive market is in long-run equilibrium. at present, there are1,000...