Lady sells. Timber in a perfectly competitive market. Income increase and many p

Question

Lady sells. Timber in a perfectly competitive market. Income increase and many people buy new homes the market demand curve shifts to the right in the short run she should expect AFirm leaves the timber business B. The Price of timber to rise C. Profits to fall D. The price of timber to remain and changed Lady sells. Timber in a perfectly competitive market. Income increase and many people buy new homes the market demand curve shifts to the right in the short run she should expect AFirm leaves the timber business B. The Price of timber to rise C. Profits to fall D. The price of timber to remain and changed

Explanation / Answer

Answer

B. The Price of timber to rise

The curve shifts to right so the price and quantity both increase in short run

and in long run:

The market is perfectly competitive as the profit increased the new firms will enter the market and in long run, there will be zero economic profit so she will expect profit to fall.

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