In a Perfectly Competitive Market, in Response to a Permanent

question 162

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 the eventual long run equilibrium price.
• D)we cannot know whether the short run equilibrium price will be below the eventual long run equilibrium price.

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