consider a perfectly competitive market with identical firms. Each firm has the usually shaped cost curves. Marke price is currently $5. we are in long-run and short-run market equilibrium. If market demand increases... A. market price increases tin the long-run B. each firm's average variable cost decreases in the long-run C. each firm's quantity stays the same in the short- run

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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consider a perfectly competitive market with
identical firms. Each firm has the usually shaped
cost curves. Marke price is currently $5. we are in
long-run and short-run market equilibrium. If
market demand increases....
A. market price increases tin the long-run
B. each firm's average variable cost decreases in
the long-run
C. each firm's quantity stays the same in the short-
run
D. Market price is min average variable cost in the
short run
E. each firm's average variable cost increases in the
short-run
Transcribed Image Text:consider a perfectly competitive market with identical firms. Each firm has the usually shaped cost curves. Marke price is currently $5. we are in long-run and short-run market equilibrium. If market demand increases.... A. market price increases tin the long-run B. each firm's average variable cost decreases in the long-run C. each firm's quantity stays the same in the short- run D. Market price is min average variable cost in the short run E. each firm's average variable cost increases in the short-run
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