The Duration of the "Short-Run

question 99

Multiple Choice

The duration of the "short-run"

• A) is one year.
• B) is the same for all goods.
• C) depends on the relative short-run elasticity of demand and supply for the good.
• D) depends on how long it takes consumers or firms to adjust for a particular good.

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Definitions:

Perfectly Competitive

A market structure characterized by a large number of small firms, a homogeneous product, and freedom of entry and exit, leading to price taking behavior by all firms.

Long-run Equilibrium

Describes a state in a market where supply equals demand, with sufficient time for all factors of production to adjust and no external pressures.

Demand

The measure of a commodity or service consumers intend and are able to acquire at multiple price levels during a set time span.

Economic Profits

Profits exceeding the opportunity costs of all resources employed, including both explicit and implicit costs, signifying above-normal returns.