Suppose an increase in population increases the demand for automobile repairs in New Haven County's market for auto repair, which is a perfectly competitive market. Which of the following is true in the short run? The market supply curve of auto repair services shifts to the left. Auto repair centers may be able to earn an economic profit. O Normal profits decrease. O The effect on equilibrium price and quantity is indeterminate. O After firms adjust to the new equilibrium, the price of auto repair services will exceed the marginal cost.

Suppose an increase in population increases the demand for automobile repairs in New Haven County's market for auto repair, which is a perfectly competitive market. Which of the following is true in the short run? The market supply curve of auto repair services shifts to the left. Auto repair centers may be able to earn an economic profit. O Normal profits decrease. O The effect on equilibrium price and quantity is indeterminate. O After firms adjust to the new equilibrium, the price of auto repair services will exceed the marginal cost.

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter8: Understanding Markets And Industry Changes

Section: Chapter Questions

Problem 8.4IP

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