In a perfectly competitive market you observe that, after a permanent increase in demand in the long run, price increases. You can conclude that this market exhibits _______.

Question

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In a perfectly competitive market, a permanent increase in demand leading to a price increase in the long run suggests that the cost of production increases as the industry output increases. This scenario is indicative of external diseconomies, where the expansion of the industry raises the costs for all firms in the market.

In a Perfectly Competitive Market You Observe That, After a Permanent