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The market for gasoline is perfectly competitive and begins in long-run equilibrium. Suppose that demand for gas rises. Compared to its initial long-run equilibrium value,
The market for gasoline is perfectly competitive and begins in long-run equilibrium. Suppose that demand for gas rises. Compared to its initial long-run equilibrium value, what happens tothe profitsearned by a single firm when the market settles into the newshort-run equilibrium? Assume that this is a constant cost industry.
Group of answer choices
Decrease.
Not enough information to say.
Increase.
Unchanged.
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