A sudden fall in the market in a competitive industry leads to

Economics Dec 09, 2020

A sudden fall in the market in a competitive industry leads to .

Expert Solution

The correct answer is A market equilibrium price higher than the short-run price. The short term price would fall according to the market. But, the overall market equilibrium would stay higher. In order for the market equilibrium to lower significantly, the short term fall would have to extend for a period of time.

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