11.Supply in a Competitive Market End of Chapter Problem

Suppose that the restaurant industry is perfectly competitive. All producers have identical cost curves, and the industry is currently in long-run equilibrium, with each producer producing at its minimum long-run average total cost of $8.

a.Suppose there is a sudden increase in demand for restaurant meals. In the short run, the price of restaurant meals will_____________, and individual firms will respond to the price change by_____________their output. In the long run, the price of restaurant meals will__________________its original level, as firms__________________the industry.

b.In the market as a whole, the change in the equilibrium quantity will be______________.

c.For the individual firm, the change in the equilibrium quantity will be__________

in the short run and__________________in the long run.