Assume a Purely Competitive Increasing-Cost Industry Is Initially in Long-Run

Multiple Choice

Assume a purely competitive increasing-cost industry is initially in long-run equilibrium, producing 10 million units at a market price of $5.00. Suppose that an increase in consumer demand occurs. After all economic adjustments have been completed, which output and price combination is most likely to occur?

A) 11 units at a price of $4.75.
B) 12 units at a price of $5.50.
C) 9.5 units at a price of $4.50.
D) 9 units at a price of $5.25.