Suppose in the city of Smugsburg, Blu-ray disc rental stores operate in a monopolistically competitive market. If the price of Blu-ray disc rentals in Smugsburg is currently equal to $5 per tape and the average cost of renting videos is $1 per Blu-ray disc, in the long run we expect the price of renting Blu-ray discs to:
increase.
stay the same.
decrease, and the average cost of Blu-ray disc rentals to increase.
decrease, and the average cost of Blu-ray disc rentals to decrease.