In a Perfectly Competitive Market,in Response to a Permanent Increase

question 187

Multiple Choice

In a perfectly competitive market,in response to a permanent increase in demand:

• A) the short run equilibrium price will be higher than the eventual long run equilibrium price.
• B) the short run equilibrium price will be lower than the eventual long run equilibrium price.
• C) the short run equilibrium price will be the same as than the eventual long run equilibrium price.
• D) we cannot know whether the short run equilibrium price will be above, below or equal to the eventual long run equilibrium price.