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When Demand Increases, In The Short Run The Purely Competitive Firm:

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Will earn higher profits or experience smaller losses Explanation: When demand for a product increases in a purely competitive market, in the short run as the price goes up, firms currently in the market will earn more revenue for each unit of output that they produce. If firms are earning more revenue for each unit that they produce, they either will post higher profits or they will experience smaller losses.

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