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Consider a competitive market with a large number of identical firms. the firms in this market do not use any resources that are available only in limited quantities. in this market, an increase in demand will:A. increase price in the short run but not in the long run.B. increase price in the long run but not in the short run.C. increase price both in the short and the long run.D. not affect price in either the short or the long run.

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tutordamola

Answer:

The answer is D.

Explanation:

In perfect competition market, all the firms produce similar goods. And firms are so large (because there is no barrier to entry) that no one can influence the market price i.e they cannot not affect price in either the short or the long run. If a firm increase its own price, consumers wont buy from him because all other offers similar goods or services

Firms in this industry are price range e,

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