Assume the purely competitive market is in long-run equilibrium.
For some reason market demand increases. What would
happen?
Group of answer choices
At first, all firms would achieve economic profit, but
eventually economic profit would fall back to zero as new firms
enter the market.
Market price would increase, and producers would band together
to prevent new entrants to the market.
Market prices would fall, causing producers to reduce output.
All economic losses are incurred, firms start leaving the
market.
An increase in market demand would not produce any change in
price, production, or the movement of firms in and out of the
market.
