Suppose That the Market for Haircuts in a Community Is

question 139

Multiple Choice

Suppose that the market for haircuts in a community is perfectly competitive and that the market is initially in long-run equilibrium.Subsequently,a decrease in population decreases the demand for haircuts.In the short run,we expect that the market price will _____ and the output of a typical firm will _____.

• A)rise;rise
• B)rise;fall
• C)fall;rise
• D)fall;fall

---

Definitions:

Operating Activities

Transactions and events that are directly related to the primary operations of a business, typically involving revenue and expense activities.

Investing Activities

Transactions involving the purchase or sale of long-term assets and other investments not considered cash equivalents, usually reflected in the cash flow statement of a company.

Cash Dividends

Payments made by a corporation to its shareholders, usually in the form of cash, out of its profits or reserves.

Payable

Refers to an amount of money that a company owes to its creditors or suppliers, to be paid at a later date.