If it is not in long-run equilibrium, what will happen in this industry to restore long-run equilibrium? 11 In long-run equilibrium, what is the firm's profit-maximizing quantity?

11. Consider a competitive market where firms have U-shaped cost curves. Which of the following is true? a. The long run market supply curve for a constant cost industry is upward sloping, and, the short run supply curve of each firm is upward sloping. b. The long run market supply curve for an increasing cost industry is upward sloping, and, the short run supply curve of each firm is upward sloping. c. The long run market supply curve for a decreasing cost industry is upward sloping, and, the short run supply curve of each firm is upward sloping. d. The long run market supply curve for an increasing cost industry is downward sloping, and, the short run supply curve of each firm is horizontal. e. None of the above.

4. The demand for an individual firm's output depends on the demand for the industry's output, the number of firms in the industry, and the structure of the industry. O a. True Ob. False

3. Suppose a perfectly competitive firm is operating at a level of output such that P> MC. Would you advise this firm to keep producing at this level or should it increase or decrease its output? Why? (Hint: it will help you to draw a graph for a perfectly competitive firm in short run equilibrium. The level of profit in equilibrium does not matter).