Asked by Garrison Hallu, on Sep 24, 2024
A sudden rise in the market demand in a competitive industry leads to
A) A short run market equilibrium price higher than the original equilibrium
B) A market equilibrium higher than the short run price
C) Some firms exiting the market
D) All of the above
Market Equilibrium
The state in which the quantity supplied equals the quantity demanded, causing market forces to be in balance.
Competitive Industry
An industry characterized by numerous sellers and buyers, where no single entity has the market power to influence the price of goods or services.
Market Demand
The total quantity of a product or service that consumers are willing and able to purchase at various prices.
- Appreciate the dynamics of market equilibrium modifications in the short and long run, owing to demand and supply fluctuations in sectors of competition.
- Ascertain the variables contributing to the ingress and egress of enterprises in a market characterized by competition.
Learning Objectives
- Appreciate the dynamics of market equilibrium modifications in the short and long run, owing to demand and supply fluctuations in sectors of competition.
- Ascertain the variables contributing to the ingress and egress of enterprises in a market characterized by competition.