General Snacks is a typical firm in a market characterized by monopolistic competition.Initially,the market is in long-run equilibrium,and then there is an increase in the market demand for snacks.In the short run the price of snacks will _ and the market output of snacks will _.

A) fall;fall
B) remain unchanged;remain unchanged
C) rise;fall.
D) rise;rise

Question

General Snacks is a typical firm in a market characterized by monopolistic competition.Initially,the market is in long-run equilibrium,and then there is an increase in the market demand for snacks.In the short run the price of snacks will _____ and the market output of snacks will _____.

A) fall;fall
B) remain unchanged;remain unchanged
C) rise;fall.
D) rise;rise

Mahek Katariya · Accepted Answer

Final Answer : D, Explanation :  In the short run, an increase in market demand for snacks in a monopolistic competitive market leads to higher prices due to increased demand and higher market output as firms increase production to meet the new demand.

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