In a Classical Long Run Supply model, what will occur to the real output if you raise the prices of products in a market? A. Raising prices will create a shortage in supplies. B. Raising prices will result in labor dispute or strike. C. Raising prices will have no impact on output. D. Raising prices will force the market to collapse.
The market is said to be in the state of equilibrium when the curves of the supply and demand intersect with each other. It is at this position that the quantity of product supplied and the quantity of the demand are equal. The state of surplus is reached when the market price exceeds the equilibrium price. Market price falls when the supply quantity is greater than the demand quantity.
