Graph 14-8
-Refer to Graph 14-8. Assume that the market starts in equilibrium at point A in panel (b) . An increase in demand from Demand0 to Demand1 will result in:
A) a new market equilibrium at point D
B) rising prices and falling profits for existing firms in the market
C) falling prices and falling profits for existing firms in the market
D) an eventual increase in the number of firms in the market and a new long-run equilibrium at point C
Correct Answer:
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