Consider a perfectly competitive market experiencing good times. In the short run, the equilibrium price will ________ and firms will earn a(n) ________

A) increase; economic profit as the new price exceeds average total cost
B) increase; normal profit as the new price exceeds average total cost
C) decrease; economic loss as new firms enter the industry
D) decrease; economic profit as firms exit the industry
E) may increase or decrease; normal profit depending on their costs


A

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