In a perfectly competitive market, a permanent increase in demand initially brings a higher price, economic

Name: In a perfectly competitive market, a permanent increase in demand initially brings a higher price, economic
Brand: Quizplus
Rating: 4.9 (60 reviews)

Question

Quizplus · Accepted Answer

In a perfectly competitive market, a permanent increase in demand initially leads to higher prices and economic profits for firms. This attracts new firms to enter the market, increasing supply until prices return to the level of normal profit.

In a Perfectly Competitive Market, a Permanent Increase in Demand