Assume the purely competitive market is in long-run equilibrium. For some reason market demand increases. What would happen? Group of answer choices Market prices would fall, causing producers to reduce output. All economic losses are incurred, firms start leaving the market. At first, all firms would achieve economic profit, but eventually economic profit would fall back to zero as new firms enter the market. An increase in market demand would not produce any change in price, production, or the movement of firms in and out of the market. Market price would increase, and producers would band together to prevent new entrants to the market.
Assume the purely competitive market is in long-run equilibrium. For some reason market demand increases. What would happen? Group of answer choices Market prices would fall, causing producers to reduce output. All economic losses are incurred, firms start leaving the market. At first, all firms would achieve economic profit, but eventually economic profit would fall back to zero as new firms enter the market. An increase in market demand would not produce any change in price, production, or the movement of firms in and out of the market. Market price would increase, and producers would band together to prevent new entrants to the market.
Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter22: Perfect Competition
Section: Chapter Questions
Problem 4QP
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Assume the purely competitive market is in long-run equilibrium. For some reason market demand increases. What would happen?
Group of answer choices
Market prices would fall, causing producers to reduce output. All economic losses are incurred, firms start leaving the market.
At first, all firms would achieve economic profit, but eventually economic profit would fall back to zero as new firms enter the market.
An increase in market demand would not produce any change in price, production, or the movement of firms in and out of the market.
Market price would increase, and producers would band together to prevent new entrants to the market.
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