Multiple Choice
Suppose that there has been bad weather, a decrease in the availability of oil, or some other temporary increase in firms' costs and the economy has reached its new short-run equilibrium. What happens as the economy moves from this short-run equilibrium to long-run equilibrium?
A) Prices and output rise.
B) Prices and output fall.
C) Prices rise and output falls.
D) Prices fall and output rises.
Correct Answer:
Verified
Correct Answer:
Verified
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