A Competitive Market Is in Long-Run Equilibrium

question 3

Multiple Choice

A competitive market is in long-run equilibrium. If demand decreases, we can be certain that price will

• A)fall in the short run.All firms will shut down, and some of them will exit the industry.Price will then rise to reach the new long-run equilibrium.
• B)fall in the short run.No firms will shut down, but some of them will exit the industry.Price will then rise to reach the new long-run equilibrium.
• C)fall in the short run.All, some, or no firms will shut down, and some of them will exit the industry.Price will then rise to reach the new long-run equilibrium.
• D)not fall in the short run because firms will exit to maintain the price.

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Definitions:

Night Shift

A work shift that takes place during the nighttime hours, typically starting late in the evening or at midnight and ending in the morning.

Hypnagogic State

A transitional state of consciousness occurring between wakefulness and sleep, often characterized by vivid sensory phenomena or hallucinations.

Night Terrors

Intense episodes of fear that occur during sleep, typically in children, causing them to wake up in a terrified state.

Rapid Eye Movement

A phase of sleep characterized by quick, random movements of the eyes, associated with vivid dreaming.