Answered: Consider a perfectly competitive market…

Microeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506893

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter9: Price Takers And The Competitive Process

Section: Chapter Questions

Problem 5CQ

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Question

Consider a perfectly competitive market at a long-run equilibrium. Suppose demand increases. What do you expect to happen as a result of the demand increase?

Group of answer choices

-Prices go down in the short run and firms neither enter or exit the market.

-Prices go up in the short run and new firms enter the market.

-Prices go down in the short run and new firms enter the market.

-Prices go down in the short run and firms exit the market

-Prices go up in the short run and firms neither enter or exit the market.

-Prices go up in the short run and firms exit the market

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