Question

23. What is the long-run effect (relative to the original long-run equilibrium) on a perfectly competitive constant-cost industry of a technological change that causes a fall of $1 per unit in the long run costs of all firms (presuming normally-shaped cost curves)? (A) fall in price by less than $1, decrease in firm output and industry output, and no change in profit (B) fall in price by less than $1, decrease in industry output, but no change in firm output or profit (C) fall in price by less than $1 and increase in firm output, industry output and profit (D) fall in price by less than $1, increase in firm and industry output and no change in profit (E) fall in price by more than $1 and decrease in firm output, industry output and profit (F) fall in price by more than $1, decrease in firm and industry output and no change in profit (G) fall in price by $1, decrease in firm output, but no change in industry output or profit (H) fall in price by $1, no change in firm output or profit and an increase in industry output. (1) fall in price by $1 and decrease in firm output, industry output, and profit (J) none of the above