The Market for Beef Is in Long-Run Equilibrium at a Price

question 61

Essay

The market for beef is in long-run equilibrium at a price of $3.25 per pound.The announcement that mad cow disease has been discovered in the United States reduces the demand for beef sharply, and the price falls to $2.00 per pound.If the long-run supply curve is horizontal, then when the long-run equilibrium is reestablished, the price will be:
A.$3.25 per pound.
B.$2.00 per pound.
C.greater than $2.00 per pound but less than $3.25 per pound.
D.More information is needed to answer this question.

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