Suppose a perfectly competitive firm and industry is in long-run equilibrium. A rightward shift of the market demand curve is likely to:

Question

Suppose a perfectly competitive firm and industry is in long-run equilibrium. A rightward shift of the market demand curve is likely to:​

Quizplus · Accepted Answer

A rightward shift in the market demand curve will lead to an increase in the equilibrium price and quantity in the market. This increase in price will incentivize existing firms to increase their output, and new firms to enter the industry. As a result, the demand curve facing each individual firm will shift upward, allowing them to sell more at a higher price. This will lead to an increase in the quantity supplied in the market. Therefore, the correct answer is D.

Suppose a Perfectly Competitive Firm and Industry Is in Long-Run