Check Your Understanding 1. Which of the following events will induce firms to enter 2. Assume that the egg industry is perfectly competitive an industry? Which will induce firms to exit? When will and is in long-run equilibrium with a perfectly elas- entry or exit cease? Explain your answers. tic long-run industry supply curve. Health concerns a. A technological advance lowers the fixed cost of about cholesterol then lead to a decrease in demand. production of every firm in the industry. Construct a figure similar to Figure 60.3, showing the b. The wages paid to workers in the industry go up for short-run behavior of the industry and how long-run an extended period of time. equilibrium is reestablished. c. A permanent change in consumer tastes increases demand for the good. d. The price of a key input rises due to a long-term shortage of that input