When Prices Are Free to Adjust Over Time, in the Long

question 190

Multiple Choice

When prices are free to adjust over time, in the long run, the market price of a good tends to

• A) rise above the equilibrium price in the long run.
• B) equal the equilibrium price.
• C) fall below the equilibrium price in the long run.
• D) have no specific relationship to the equilibrium price.

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Definitions:

Creditor

An individual or institution that lends money or extends credit to another party, known as the debtor.

Shareholder Rights

The entitlements and protections granted to individuals or entities that own shares in a corporation, including voting on corporate matters.

Subchapter S Corporation

A type of corporation created through an IRS tax election to pass corporate income, losses, deductions, and credits through to shareholders for federal tax purposes.

Shareholders

Individuals or entities that own one or more shares of stock in a corporation, giving them a right to a portion of the corporation's profits and assets.