1.The short-run supply curve is steeper than the long-run supply curve because of the principle of                           . 2. Arrows up or down: Suppose the demand for shirts increases.  In the ...

1.The short-run supply curve is steeper than the long-run supply curve because of the principle of

.

2. Arrows up or down: Suppose the demand for shirts increases.  In the  short run, the
 price by a relatively large amount. As firms enter the market, the  price
  . (Related to Application 6 on page 556.)

3. Suppose a perfectly competitive industry is in longrun equilibrium. If demand for its product increases, we can expect the price of the good to
  (rise/fall) at first and then
(rise/fall).