The Market for Beef Is in Long-Run Equilibrium at $3

question 326

Multiple Choice

The market for beef is in long-run equilibrium at $3.25 per kilogram.The announcement that mad cow disease has been discovered in Alberta reduces the demand for beef sharply,and the price falls to $2.00 per kilogram.If the long-run supply curve is horizontal,when the long-run equilibrium is reestablished,the price will be:

• A) $3.25 per kilogram.
• B) $2.00 per kilogram.
• C) greater than $2.00 per kilogram but less than $3.25 per kilogram.
• D) More information is needed to answer this question.