(a) As in Figure 8.16, an increase in the demand for beef will temporarily increase the market price from P₁ to P₂ and induce new ranchers to enter the market to capture the positive profits.(b) An increase in demand leads to short-run economic profit for a perfectly competitive firm, here, a cattle ranch.(c) An increase in demand leads to a short-run increase in price. Over time, new ranchers will enter the market, increasing equilibrium quantity to Q₂ and returning the market price to its long-run equilibrium P₁.