b. A constant-cost firm will not feel the impact of an increase in demand in the long run. The increase in demand increases the market price and the demand faced by a firm shifts upward. In the short-run, economic profit attracts new firms and existing firms increase output. As more firms enter the market, the market supply curve shifts rightward and the market price decreases, which shifts the individual demand downward. This process ends in a long-run equilibrium, when all economic profit is erased and the firms produce the same level of output as in the initial long-run equilibrium. For the entire market however, because more firms are producing, total output is higher than it was initially, but the price is the same, thus deriving the long-run supply curve as a horizontal line. In an increasing-cost industry, the process is similar, but for each firm in the industry, the per-unit costs increase when output increases because more production bids up resource prices. The increase in demand increases the market price and the demand faced by a firm shifts upward. In the short-run, economic profit attracts new firms and existing firms increase output. As total output increases, resource prices increase and the per-unit production costs increase, so each firm is facing higher ATC, AVC, and MC curves. As more firms enter the market, the market supply curve shifts rightward and the market price declines, which shifts the individual demand curve downward. This process ends in a long-run equilibrium, when all economic profit is erased (at the new per-unit cost curves) and the firms produce the same level of output as in the initial long-run equilibrium, but at a higher price. For the entire market however, because more firms are producing, total output is higher than it was initially, and the price is higher, thus deriving the long-run supply curve as an upward-sloping curve.