Question

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?

Answer 1

Answer:

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.