question archive Under what conditions would an increase in market demand lead to the same long-run equilibrium price? a
Under what conditions would an increase in market demand lead to the same long-run equilibrium price? a
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Under what conditions would an increase in market demand lead to the same long-run equilibrium price?
a. The firms in the market are part of a decreasing-cost industry.
b. The firms in the market are part of increasing-cost industry.
c. Potential new firms in the market are not attracted by economic profits.
d. The firms in the market are part of a constant-cost industry.
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d. The firms in the market are part of a constant-cost industry
The firm is exhibiting the usage of the same levels of inputs. An increase in the market demand would make an increment in the prices in the short run. The attraction of increased prices and profits would enable the entrance of new firms. Therefore, the same price would prevail in the long run.
