Consider a perfectly competitive market with long-run external diseconomies.When demand increases permanently,the equilibrium price

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In a perfectly competitive market with long-run external diseconomies, an increase in demand permanently leads to a rise in equilibrium price to cover the increasing costs of production caused by the external diseconomies. However, the equilibrium quantity also increases because the market is still perfectly competitive and firms are incentivized to increase production to take advantage of the higher price. Therefore, the best choice is C, which states that the equilibrium price rises and the equilibrium quantity increases.

Consider a Perfectly Competitive Market with Long-Run External Diseconomies