Graph 14-8 -Refer to Graph 14-8. Assume That the Market Starts in the Market

question 57

Multiple Choice

Graph 14-8

-Refer to Graph 14-8. Assume that the market starts in equilibrium at point A in panel (b) . An increase in demand from Demand₀ to Demand₁ will result in:

• A) a new market equilibrium at point D
• B) rising prices and falling profits for existing firms in the market
• C) falling prices and falling profits for existing firms in the market
• D) an eventual increase in the number of firms in the market and a new long-run equilibrium at point C

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