A perfectly competitive industry eg wheat is in long run equilibrium Imagine than there is an increase in the demand for wheat leading to a sudden increase in the price of wheat Using a graph for the firm level situation and a graph for the industry level situation show and explain how this increase in the price generates another longrun equilibrium through the possibility of entry by new firms

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Answer Perfectly competitive markets look different in the long run than they do in the short run In ... View the full answer