Local record dealers predicted yesterday that prices on long playing records will gradually return to normal during the next three months, though manufactures continued to announce permanent price cuts as high as 40 percent.

As new records are being classified in groups still quoted at the old prices, the price cuts will have only a temporary effect, the distributors said. Cambridge merchants reported only a small rise in sales, and blamed examinations for the lag.

Local dealers also reported a decline in quality apparently accompanied the price cuts. There have been frequent complaints about scratches and imperfect cuttings, they said.

Discounts Up to $2

Docca, Capital, and Mercury have cut most prices on their 12-inch records from $5.98 to $3.98, and on 10-inch records to $2.98. RCA and Columbia made identical reductions several weeks ago.

Several smaller companies have "compromised" at $4.98 for 12-inch records, while Westminster, Angel, and Vox, who claim high quality performance, have not cut prices.

Minute Man Radio Co. of Cambridge is offering a 20 percent discount in addition to the announced ones. Along with Briggs and Briggs, both stores are also offering 20 to 30 percent discounts on records which were not reduced.