contestada

Assume a perfectly competitive industry making peanuts is in long-run equilibrium. The price per pound of peanuts is $2. Next, assume that the demand for peanuts increases in the short run, and the price rises to $4 per pound. If this is a constant cost industry, what price per pound should we expect in the long-run

Respuesta :

Answer:

The price of the item in long run equilibrium will be the same i.e $ 2 per unit

Explanation:

Given

The equilibrium price in the long run = $ 2 per unit

The price of the item in long run equilibrium will be the same i.e $ 2 per unit

The increase of price in short run will not have much impact on the Average variable cost and hence in long run the price will remain constant.

Otras preguntas