Suppose that demand increases. If the total cost curves for the firms do not cha

Question

Suppose that demand increases. If the total cost curves for the firms do not change with the number of firms: the output per firm, total market quantity, and number of firms will increase, but equilibrium price and minimum average total cost will decrease. the minimum average total cost, output per firm, total market quantity, and number of firms will increase, but equilibrium price will decrease. the minimum average total cost, equilibrium price, and output per firm will not change, but total market quantity and the number of firms will increase. the minimum average total cost, equilibrium price, output per firm, total market quantity, and number of firms will all increase Suppose that demand increases. If the total cost curves for the firms do not change with the number of firms: the output per firm, total market quantity, and number of firms will increase, but equilibrium price and minimum average total cost will decrease. the minimum average total cost, output per firm, total market quantity, and number of firms will increase, but equilibrium price will decrease. the minimum average total cost, equilibrium price, and output per firm will not change, but total market quantity and the number of firms will increase. the minimum average total cost, equilibrium price, output per firm, total market quantity, and number of firms will all increase

Explanation / Answer

When the demand increases but the total cost curves for the firms do not change with the number of firms then in that case the minimum average total cost, equilibrium price, and output per firm will not change.

However, total market quantity and the number of firms will increase.

The correct answer is the option (3).

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