In the short-run, a fall in demand results in _____ while in the long-run, a fall in demand results in ______
A. an increase in output and prices; a decline in output only
B. a fall in prices and an increase in output; no change in output or prices
C. a fall in prices only; and fall in output and prices
D. a fall in output and prices; a fall in prices only
Ans: D. a fall in output and prices; a fall in prices only
You might also like to view...
An increase in market supply will increase price
Indicate whether the statement is true or false
Two firms, Industrio and Capitalista, have access to five production processes, each of which has a different cost and gives off a different amount of pollution. The daily costs of the processes and the corresponding number of tons of smoke emitted are shown in the table below. Both firms currently use process A, and each emits 4 tons of smoke per day. The government is considering two plans to reduce pollution: requiring both firms to reduce pollution by 25 percent or auctioning pollution permits. Each permit would entitle the owner to emit one ton of smoke per day. Without a permit, no smoke can be emitted. Process(smoke/day) A(4 tons/day) B(3 tons/day) C(2 tons/day) D(1 ton/day) E(0 tons/day) Cost to Industrio ($/day) $350$400$500$700$1,000 Cost to Capitalista
($/day) $225$250$290$400 $600Suppose a permit system has been adopted and each firm has already purchased one permit. Industrio would be willing to pay up to ________ for the right to emit a second ton of smoke, and Capitalista would be willing to pay up to ________ for the right to emit a second ton of smoke. A. $200; $110 B. $200; $300 C. $100; $40 D. $500; $290