In the long run,what adjustments take place when a perfectly competitive market in long-run equilibrium experiences an increase in demand?
A) Price and profits fall, causing new firms to enter and existing firms to expand.
B) Price and output remain fixed.
C) Price rises but output remains unchanged.
D) Price rises and firms expand output by using existing capacity more intensively.
E) New firms enter and existing firms expand capacity, leading to an increase in supply and a decline in price.
Correct Answer:
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