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.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
100%
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.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education