Asked by Amanda Herrera on May 30, 2024
Verified
General Snacks is a typical firm in a market characterized by monopolistic competition.Initially,the market is in long-run equilibrium,and then there is an increase in the market demand for snacks.In the short run the price of snacks will _____ and the market output of snacks will _____.
A) fall;fall
B) remain unchanged;remain unchanged
C) rise;fall.
D) rise;rise
Market Demand
The overall amount of a product or service all buyers in a market can and want to buy at different price levels.
Market Output
The total quantity of a good or service produced and offered for sale in a market.
- Detail the influence of changes in market demand on price adjustments, production volumes, and financial gains over short and prolonged durations.
Verified Answer
MK
Mahek KatariyaMay 31, 2024
Final Answer :
D
Explanation :
In the short run, an increase in market demand for snacks in a monopolistic competitive market leads to higher prices due to increased demand and higher market output as firms increase production to meet the new demand.
Learning Objectives
- Detail the influence of changes in market demand on price adjustments, production volumes, and financial gains over short and prolonged durations.
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