Asked by Chyniquia Johnson on Jul 04, 2024
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The model of monopolistic competition characterizes the market for plumbing services in a city.This market is initially in long-run equilibrium,but then there is an increase in market demand for plumbing services.We expect that in the long run:
A) firms will leave the plumbing market.
B) there will be a short-run increase in the number of firms,but then the number will return to the original level.
C) new firms will enter the plumbing market.
D) firms will shut down,but they will not leave the industry.
Market Demand
The total quantity of a good or service that all consumers in a market are willing and able to buy at various prices.
Plumbing Market
A segment of the market that deals with the distribution and installation of water supply and sanitary systems in buildings.
Long-Run Equilibrium
A state in which all firms in an industry are producing at their minimum long-run average cost, and the market supply equals market demand.
- Analyze the impact of an increase in demand within monopolistically competitive markets and predict market dynamics.
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Learning Objectives
- Analyze the impact of an increase in demand within monopolistically competitive markets and predict market dynamics.
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