Respuesta :
Suppose a perfectly competitive market exists in long-run equilibrium and then there stands a permanent increase in the demand for that product. the new long-run equilibrium will have more firms in the market.
What is perfectly competitive market?
Revenues less expenses are the company's profits. A company's ability to make a profit determines whether it can obtain bank financing, draw in investors to finance its operations, and expand. Without making a profit, businesses cannot stay in operation. Businesses can only make money or lose money in a market that is perfectly competitive in the near term. Profits and losses are ultimately eliminated because an endless number of businesses produce uniform, infinitely divisible items.
It is theoretically possible for all markets to be in equilibrium over the long run, during which time all prices and quantities will have entirely adjusted and will be in equilibrium. The short-run, where there are certain restrictions and markets are not completely in equilibrium, contrasts with the long-run.
Hence, Suppose a perfectly competitive market exists in long-run equilibrium and then there stands a permanent increase in the demand for that product. the new long-run equilibrium will have more firms in the market.
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