Suppose that U.S. manufacturers produce less output. What impact will this have on the
independent trucking industry in the short run, in terms of the market price, output of an
individual firm, and market equilibrium quantity? Is perfect competition market good?

Perfect competition in economics means a market structure defined by many buyers and
sellers, free entry and exit, and homogeneity of commodities. In a perfect market structure, the
market share does not influence prices. The independent trucking industry is considered as a
perfect example of perfect competition. Supposing the U.S. manufacturers produce less output;
this will have an impact of reducing a firm’s revenue, output and increase the equilibrium price.
This is because the firm’s reduced output negatively impacts a firm’s market price in the long-
run. The decreased market price for semi-trucks in a firm will cause the market supply line to
shift to the left, thus decreasing the equilibrium price. Therefore, in the long-run, the firm will
decrease output, market price, equilibrium price, and profits.

What impact will the increase in manufacturing output have in the long run?

Suppose the manufacturers produce more output; this will have the following effects in
the long-run. Increasing the rate of manufacturing output will increase the quantity of output of
large semi-truck manufacturers in the United States. In turn, this will increase at a constant rate
the market price of individual firms in the short-run. Similarly, increased output in the tracking
industry means that the market supply line will shift to the right and decrease the equilibrium
price of each truck in the short-run. This is because the Independent tracking industry will
experience excess supply and, at the same time, low market price. Additionally, it will bring
about price discrimination and thus, more efficient business outcomes. APA