Increase in the demand for wheat

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A perfectly competitive industry (e.g., wheat) is in long run equilibrium. Imagine that 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 long-run equilibrium through the possibility of entry by new firms.

Reference no: EM132422662

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