Figure shows the short-run and long-run adjustment process for an increasing cost industry responding to an increase in demand. Draw a similar two panel diagram, illustrating the response of an increasing cost industry to a decrease in demand. Draw in the long-run supply curve. In the long run, will the price be higher or lower, compared to the initialprice?

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Business Travelers Students Dollars er Ticket Dollars er Ticket 200 $140- $70-- $40 MC $40 MC MR I MR 20 50 Num ber of Round Trip Tickets per Day Number of Round Trip Tickets per Day 60