Consider a Perfectly Competitive Market Experiencing Good Times

Multiple Choice

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