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Suppose That the Market for Haircuts in a Community Is

question 35

Multiple Choice

Suppose that the market for haircuts in a community is perfectly competitive and that the market is initially in long-run equilibrium.Subsequently,an increase in population increases the demand for haircuts.In the short run,the market price will _____ and the output of a typical firm will _____.


Definitions:

Deferred Tax Liability

A tax obligation that a company owes but has not yet paid, arising from temporary differences between its taxable income and its accounting earnings.

Partial Hedge

A risk management strategy that does not fully offset the potential losses from an exposure, covering only a portion of the risk.

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