The market for beef is in long-run equilibrium at a price of $3.25 per pound. The announcement that mad cow disease has been discovered in the United States reduces the demand for beef sharply, and the price falls to $2.00 per pound. If the long-run supply curve is horizontal, then when the long-run equilibrium is reestablished, the price will be:
Select one:
A. $3.25 per pound.
B. More information is needed to answer this question.
C. $2.00 per pound.
D. greater than $2.00 per pound but less than $3.25 per pound.
A. $3.25 per pound.
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