Multiple Choice
A perfectly competitive market is initially in long-run competitive equilibrium. Then, market demand increases. This causes existing firms in the market to __________ and __________. As a result of the latter, the market supply curve shifts __________.
A) produce more output; some existing firms to exit the market; leftward
B) produce less output; new firms to enter the market; rightward
C) produce more output; new firms to enter the market; rightward
D) expand their plant size; some existing firms to exit the market; leftward
E) none of the above
Correct Answer:
Verified
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