When demand increases in a perfectly competitive market, in the short run ________, and in the long run ________.
A. quantity supplied increases; prices increase
B. quantity supplied decreases; prices decrease
C. prices increase; supply increases
D. prices increase; prices stay permanently higher
Answer: C
You might also like to view...
The best example of a frictionally unemployed individual is
A) Charles who has lost his job as an autoworker because of increased imports and can't find a good job that utilizes his skills. B) Mary who quit her job to find work closer to her home. C) Sam who lost his job as a real estate salesperson when the housing market went soft because of a recession. D) Sandy who has few skills and is no longer looking for work.
Why is the demand for a luxury generally more elastic (or less inelastic) than the demand for a necessity?
What will be an ideal response?