Suppose a Perfectly Competitive Market Is in Long-Run Equilibrium and Then

question 147

Multiple Choice

Suppose a perfectly competitive market is in long-run equilibrium and then there is a permanent increase in the demand for that product.The new long-run equilibrium will have

• A) fewer firms in the market.
• B) more firms in the market.
• C) the same number of firms in the market.
• D) probably a different number of firms, but it is not possible to determine if there will be more or fewer firms.
• E) a permanent decrease in supply.

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Definitions:

Fruits

The mature ovary of a flowering plant, usually containing seeds. Fruits serve as a means for plants to disseminate seeds.

Loam

Soil with roughly equal amounts of sand, silt, and clay.

Silt

Fine-grained soil or sediment with particles smaller than sand and larger than clay, often carried by water and deposited as sediment.

Clay

A natural, earthy material composed of fine-grained minerals, often used in pottery, bricks, and sculpture, known for its plasticity when moist.