The market for maple syrup is perfectly competitive.Suppose that the market is in long-run equilibrium when the market demand for maple syrup increases.All of the following occur except

Question

Quizplus · Accepted Answer

If the market demand for maple syrup increases, there will be a short-run adjustment period where the price rises and existing firms make an economic profit. However, in the long run, new firms will enter the market which will increase the supply and drive down the price until firms are only earning a normal profit (zero economic profit). Therefore, in the long run, firms will not make an economic profit.

The Market for Maple Syrup Is Perfectly Competitive