Question

Suppose a competitive industry faces an increase in demand​ (i.e., the demand curve shifts​ upward). What are the steps by which a competitive market ensures increased​ output? Will your answer change if the government imposes a price​ ceiling? If demand​ increases, then output will increase with competition because A. price will​ decrease, decreasing​ profit, prompting existing firms to stop producing output. B. average cost will​ decrease, increasing​ profit, prompting . C. price will become less than marginal​ cost, prompting . D. price will​ increase, increasing​ profit, prompting . E. price will​ increase, increasing​ profit, prompting .

Answer 1

Answer: price will​ increase, increasing​ profit, prompting new firms to begin producing output.

Step-by-step explanation:

If competitive industry faces an increase in demand​ that is, the demand curve shifts​ upward, this will lead to.a increase in the price of the food or service.

As a result of the fact that there is an increase in price coupled with the increase in demand that resulted in the rice in price, then the profit will increase. This will prompt new firms to begin producing output.