Assume a purely competitive decreasing-cost industry is initially in long-run equilibrium but then there is a decrease in consumer demand. After all economic adjustments to this new situation have taken place, product price will be:

A. Higher, but total output will be lower
B. Lower, and total output will be lower
C. Higher, and total output will be higher
D. Lower, but total output will be higher

A. Higher, but total output will be lower

Economics

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Donnie's Donuts incurs $450,000 per year in explicit costs and $200,000 in implicit costs. The bakery earns $800,000 in revenues and has $2 million in net worth. Based on this information, what is the economic profit for Donnie's Donuts?

A) $150,000 B) $350,000 C) $600,000 D) $1.2 million

Economics

Donnie's Donuts incurs $450,000 per year in explicit costs and $200,000 in implicit costs. The bakery earns $800,000 in revenues and has $2 million in net worth. Based on this information, what is the accounting profit for Donnie's Donuts?

A) $150,000 B) $350,000 C) $600,000 D) $1.2 million

Economics