In a perfectly competitive market, in response to a permanent decrease in demand:
a. the short run equilibrium price will be higher than the eventual long run equilibrium price
b. the short run equilibrium price will be lower than the eventual long run equilibrium price.
c. the short run equilibrium price will be the same as than the eventual long run equilibrium price.
d. we cannot know whether the short run equilibrium price will be above, below or equal to the eventual long run equilibrium price.
b
You might also like to view...
"The Clayton Act repealed the Sherman Act so that only the Clayton Act remains in force." Is the previous statement correct or incorrect?
What will be an ideal response?
When drawing a production possibilities frontier, all of the following are usually assumed except one. Which is the exception?
a. The quantity of resources is rapidly growing. b. Technology is fixed. c. Resources can be shifted between production of the two goods. d. The production possibilities frontier is drawn for a particular time period. e. Resources are fully and efficiently employed.
If the Federal Reserve increases the legal reserve requirement, banks are not obliged to comply
Indicate whether the statement is true or false
How is the unemployment rate calculated? Describe the three principal types of unemployment