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If the market price in a competitive industry were above its long run equilibrium level, what...

If the market price in a competitive industry were above its long run equilibrium level, what would you expect to happen? Show changes graphically as well!

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Here, the firm is producing at the price level of $30 and output 70, this is above the long run equilibrium that is at B, the firm in the market is making a profit and that will allow more and more firms to come in. The firms output will decrease with the price and overall the market output will increase as more firms are producing, the long run equilibrium will be at the level of p= $24 and output 60, this is also where the ATC is the lowest.

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