A competitive market is in long-run equilibrium. If demand increases, we can be certain that price will a. not rise in the short run because firms will enter to maintain the price. b. rise in the short run. Some firms will enter the industry. Price will then rise to reach the new long-run equilibrium. c. fall in the short run. All, some, or no firms will shut down, and some of them will exit the industry. Price will then rise to reach the new long-run equilibrium. d. rise in the short run. Some firms will enter the industry. Price will then fall to reach the new long-run equilibrium.
A competitive market is in long-run equilibrium. If demand increases, we can be certain that price
will
| a. | not rise in the short run because firms will enter to maintain the price. |
| b. | rise in the short run. Some firms will enter the industry. Price will then rise to reach the new long-run equilibrium. |
| c. | fall in the short run. All, some, or no firms will shut down, and some of them will exit the industry. Price will then rise to reach the new long-run equilibrium. |
| d. | rise in the short run. Some firms will enter the industry. Price will then fall to reach the new long-run equilibrium. |
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