In a perfectly competitive market in long-run equilibrium, an increase in demand creates economic profit in the short run and induces entry in the long run.
Explanation:
In optimal competition, equilibrium is the position where consumer demands are equal to market supply. In the short term demand will impact equilibrium. In the long run both a product's demand and supply would affect the balance in perfect competition.
In the long run, companies participating in a perfectly competitive market gain zero income. The long-run equilibrium position for a perfectly competitive market emerges in which the demand curve (price) collides the marginal cost curve (MC) and the Average Cost (AC) curve minimum point.
