A perfectly competitive market is initially in long-run competitive equilibrium.Then,market demand increases.By the time all adjustments have been made,price will be __________ its original level if the industry witnesses __________ costs.

Question

Quizplus · Accepted Answer

In a perfectly competitive market with increasing costs, an increase in demand will lead to a higher long-run equilibrium price as firms face higher costs when expanding output.

A Perfectly Competitive Market Is Initially in Long-Run Competitive Equilibrium