General Snacks is a typical firm in a market characterized by the model of monopolistic competition.Initially, the market is in long-run equilibrium, and then there is an increase in demand for snacks.In the short run the price of snacks will and the output of services will _.
A)fall; fall
B)remain unchanged; remain unchanged .
C)rise; fall.
D)rise; rise

Question

Quizplus · Accepted Answer

In the short run, an increase in demand will lead to a higher price and increased output as firms respond to the higher demand by producing more to maximize profits.

General Snacks Is a Typical Firm in a Market Characterized