Assume a Purely Competitive Decreasing-Cost Industry Is in Long-Run Equilibrium

Multiple Choice

Assume a purely competitive decreasing-cost industry is in long-run equilibrium. If an increase in demand occurs, firms will

A) enter the industry, price will rise, and quantity produced will fall.
B) leave the industry and price and quantity will both fall.
C) enter the industry and price and quantity will both rise.
D) enter the industry, price will fall, and quantity produced will rise.