Optimal production level for a typical firm in long-run Assuming all firms have identical cost functions. Now suppose there is an increasing shift in the demand curve. As we all know that for increasing costs case, both average costs (AC) and marginal costs (MC) faced by a typical firm would be higher. The question is, whether the optimal production level of a typical firm remains constant or increases (or decreases! is it possible?) as compared to previous long-run equilibrium position?

In other words, as both MC and AC curve will shift upward, can one predict with certainty the direction in which optimal production level moves to ensure MC=AC_min?
It appears we start at long-run equilibrium point. 

The fact that all firms operate at the level where $q^*:MC = \min AC$, means that given demand $Q^d$ and the cost structure, what is endogenously determined is the number of firms $m$:

$$Q^d = mq^* \implies m^* = \frac {Q^d}{q^*}$$

Assume that aggregate demand increases. In the microeconomic setting we are examining things here, the cost/technology structure will not be affected by this change (we do not place bounds and the production inputs available). So in the new equilibrium, each individual firm will produce exactly the same as before. 

What will change is the number of firms, which will increase, in order to accommodate the new higher required output.