By considering many potential shifts in demand, we can examine long-run pricing in this industry. Our discussion suggests that no matter how demand shifts, economic forces that cause price always to return to P1 come into play. All long-run equilibria occur along a horizontal line at P1. Connecting these equilibrium points shows the long-run supply response of this industry. This long-run supply curve is labeled LS in Figure 10-7. For a constant cost industry of identical firms, the long-run supply curve is a horizontal line at the low point of the firms’ long-run average total cost curves. The fact that price cannot depart from P1 in the long run is a direct consequence of the constancy of input prices as new firms enter. Application 10.3: Movie Rentals looks at some cases where this is approximately true.