Assuming long- run external diseconomies exist, when demand increases in a perfectly competitive market, in the long run the price of the product _______ the initial price (before the increase in demand) and the quantity _______.

Question

Quizplus · Accepted Answer

Long-run external diseconomies cause production costs to increase as the industry expands, leading to higher prices. An increase in demand further raises the quantity produced.

Assuming Long- Run External Diseconomies Exist, When Demand Increases in a Perfectly