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Explain Why a Sudden Decrease in Demand in a Competitive

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Essay

Explain why a sudden decrease in demand in a competitive industry causes price to fluctuate more in the short run than in the long run, compared to the original equilibrium price.


Definitions:

Practice

The actual application or use of an idea, belief, or method, as opposed to theories about such application or use.

Departmentalization

The process of dividing an organization into different departments, which perform different tasks or functions.

Units

Measurements or quantities of a product, item, or component regarded as a single entity.

Organization

An entity, such as a company, institution, or association, composed of individuals working together towards a common goal, structured to allocate responsibilities, tasks, and authority.

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