Bacon consumption has been in decline over the past several years as more studies have been made public detailing the carcinogenic properties of bacon. Assume that the bacon industry is perfectly competitive and consists of firms with U-shaped long-run average cost curves. Suppose the industry was in long-run equilibrium before the decline began. Now consider a permanent decrease in demand for bacon. Assume this is a constant cost industry.

Fill in the blank for the following questions.(Each blank is worth 3points each.)

1. Compared to the original long-run equilibrium, will the market equilibrium price rise, fall, or stay the same in the short run? Pick one.
2. Compared to the original long-run equilibrium, will the output per firm rise, fall, or stay the same in the short run? Pick one.
3. Compared to the original long-run equilibrium, will the market equilibrium price rise, fall, or return to the original equilibrium level in the long run? Pick one.
4. Compared to the original long-run equilibrium will output per firm rise, fall, or return to the original equilibrium level in the long run? Pick one.