31、In perfectly competitive constant-cost industries and perfectly competitive increasing-cost industries, respectively,what is the most likely long-run effect of a permanent increase in demand?

      Constant-cost industry Increasing-cost industry

A.   Price decreases    Price decreases

B.    Price decreases    Price remains unchanged

C.   Price remains unchanged     Price increases

D.   Price remains unchanged     Price remains unchanged

A. Answer A

B. Answer B

C. Answer C

D. Answer D

答案和详解如下：

31、Correct answer is C

"Perfect Competition," Michael Parkin

2008 Modular Level I, Vol. 2, pp. 159-168

Study Session 5-18-d

discuss how a permanent change of demand or changes in technology affect price, output, and economic profit

In the case of constant-cost industries, the long-run supply curve is perfectly elastic or horizontal. Therefore, a permanent increase in demand would have no effect on the price in the long run. In the case of an increasing-cost industry, the long-run supply curve slopes upward and a permanent increase in demand would result in an increase in the price.