Economics · Market Structures
A firm observes that after a permanent increase in output demand: 1. Its short-run marginal cost rises. 2. New firms enter the industry. 3. The market price eventually returns to its original level. This situation is most consistent with a/an:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Constant-cost industry✓
- 2Increasing-cost industry
- 3Decreasing-cost industry
- 4Natural monopoly
Correct answer
Constant-cost industry
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