Suppose that the widget industry is a perfectly competitive, decreasing cost industry and the initia. market equilibrium price and quantity are Po and Qo Suppose that the demand for widgets increases. If the new SR equilibrium price and quantity are PSr and Qsg and the new LR equilibrium price and quantity are PLR and Qur, then O PSR > PLR > Po and Qo < QSR < QLR O PSR > Po > PLR and Qo < Qsr < QLR O PSR > Po> PLR and Qo- QuR< QSR- O Po > PLR > PSR and Qo > QSR > QUR O Po = PLR < PsR and Qo < Qsr < QLR O Po> PSR - PLR and Qo> QsR- QLR.
Suppose that the widget industry is a perfectly competitive, decreasing cost industry and the initia. market equilibrium price and quantity are Po and Qo Suppose that the demand for widgets increases. If the new SR equilibrium price and quantity are PSr and Qsg and the new LR equilibrium price and quantity are PLR and Qur, then O PSR > PLR > Po and Qo < QSR < QLR O PSR > Po > PLR and Qo < Qsr < QLR O PSR > Po> PLR and Qo- QuR< QSR- O Po > PLR > PSR and Qo > QSR > QUR O Po = PLR < PsR and Qo < Qsr < QLR O Po> PSR - PLR and Qo> QsR- QLR.
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Transcribed Image Text:Suppose that the widget industry is a perfectly competitive, decreasing cost industry and the initial
market equilibrium price and quantity are Po and Qo. Suppose that the demand for widgets
increases. If the new SR equilibrium price and quantity are Psg and Qsr and the new LR equilibrium
price and quantity are PiR and QLR, then
O PSR > PLR > Po and Qo < Qsr < QuR
O PSR > Po > PLR and Qo < QsR QUR
O PSR > Po > PLR and Qo- QLR QSR-
O Po > PLR > PSR and Qo > QsR > QLR
O Po = PLR < PsR and Qo < Qsr < QLR.
O Po > PSR - PuR and Qo > Qsr - QLR
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