Suppose an increase in population increases the demand for automobile repairs in New Haven County's market for auto repair,which is a perfectly competitive market.Which of the following is true in the short run?
A) Auto repair centers may be able to earn an economic profit.
B) Normal profits decrease.
C) The market supply curve of auto repair services shifts to the left.
D) The effect on equilibrium price and quantity is indeterminate.
E) After firms adjust to the new equilibrium, the price of auto repair services will exceed the marginal cost.
Correct Answer:
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