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

question 131

Multiple Choice

In a perfectly competitive market,in response to a permanent decrease 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.

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Definitions:

Profitability

A measure of the efficiency and effectiveness of a company in generating profit from its operations. It indicates the company's ability to produce income relative to its revenue, assets, equity, or other financial metrics.

Financial Rewards

Monetary benefits provided to employees or individuals as compensation for their services or to incentivize performance.

Creditworthiness

An assessment of a borrower's ability to repay debts based on their financial history and current financial status.

Intra-company Standards

Guidelines or policies adopted within a company to ensure consistency and quality across departments or units.