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.

Microeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506893

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter11: Price-searcher Markets With High Entry Barriers

Section: Chapter Questions

Problem 13CQ

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