... have to be higher to in order to produce the same quantity) and the long-run supply. The short-run supply shifts upward to SRS1, and the long-run supply to LRS2. The short-run effect is to ... competition tend to force price to the minimum long-run average total cost, and at that point, we have the three-way equality between long-run average total cost, short-run average total cost, and ... SRS2. The increase in price causes the price to fall back to its initial level, and the quantity to increase still further to Q2. It is tempting to think that the effect of a decrease in demand...