Consider a competitive market with a large number of identical firms.What happens to the price if the demand increases in this market

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Quizplus · Accepted Answer

In a competitive market, an increase in demand will initially raise the price in the short run as firms cannot immediately increase supply. However, in the long run, new firms will enter the market, increasing supply and driving the price back to its original level.

Consider a Competitive Market with a Large Number of Identical