(Answered) when demand increases does supply increase or decreasewhen demand increases does supply increase or…

➤ How do short-run and long-run supply responses differ after a demand shock?
In the short run, firms raise output by using spare capacity, moving along the supply curve and increasing price. In the long run, firms invest, expand capacity, or new firms enter, shifting the supply curve rightward. The long-run response eases price pressure and yields a larger industry output.