World palm oil consumption has been in decline over the past several years as consumers have become more sensitive to the destruction of the rainforest to harvest palm oil. Assume that the palm oil 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 palm oil. Assume this is a constant cost industry.

Fill in the blank for the following questions.

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.