Suppose That the Market for Haircuts in a Community Is

Multiple Choice

Suppose that the market for haircuts in a community is perfectly competitive and that the market is initially in long-run equilibrium. Subsequently, an increase in population increases the demand for haircuts. In the short run, we expect that the market price will _______ and the output of a typical firm will _______ .

A) rise; rise
B) rise; fall
C) fall; rise
D) fall; fall