Assume a perfectly competitive constant-cost industry is initially at long-run equilibrium. Now suppose that a decrease in market demand occurs. After all the long-run adjustments have been completed, the new equilibrium price
a. will be greater than the initial price, but the new output will be less.
b. will be the same as the initial price, and the output will be less.
c. and industry output will be less than the initial price and output.
d. will be less than the initial price, but the new output will be greater.

A decrease in the market demand will cause the demand curve to shift to the left. This leftward shift in the demand curve will cause a decrease in the price as well as quantity. As the price of the commodity decline, the supply will decrease as well. This is because supply and price are directly related.

A fall in supply will cause the supply curve to shift to the left. This leftward shift in the supply curve will further contribute to an increase in the price until it reaches the initial price level.

At this point, the quantity will be lower than the initial level but the price will remain the same.