The market for maple syrup is perfectly competitive. Suppose that the market is in long- run equilibrium when the market demand for maple syrup increases. What happens in the short run?

Question

Quizplus · Accepted Answer

In the short run, existing firms in a perfectly competitive market will respond to an increase in market demand by increasing production to take advantage of higher prices before new firms can enter the market.

The Market for Maple Syrup Is Perfectly Competitive