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23 November, 06:24

Assume that the market is originally in equilibrium. Now suppose that this product gains a sudden popularity among consumers. How will this sudden popularity affect the profit of an individual firm in this market in the short run?

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  1. 23 November, 06:50
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    The profit of an individual firm increases from zero to a positive value.

    Explanation:

    The market demand will increase (shift right) as a result of the product's newfound popularity. The market price will increase in the short run, and as a result, the firm's economic profit will rise from 0 to a positive value in the short run.
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