A Competitive Market Is in Long-Run Equilibrium

Multiple Choice

A competitive market is in long-run equilibrium. If demand decreases, we can be certain that price will

A) fall in the short run.All firms will shut down, and some of them will exit the industry.Price will then rise to reach the new long-run equilibrium.
B) fall in the short run.No firms will shut down, but some of them will exit the industry.Price will then rise to reach the new long-run equilibrium.
C) fall in the short run.All, some, or no firms will shut down, and some of them will exit the industry.Price will then rise to reach the new long-run equilibrium.
D) not fall in the short run because firms will exit to maintain the price.