Which of the following best characterizes prices in the long run, but NOT in the short run?
A) All prices are flexible.
B) Prices are NOT flexible.
C) Some resource prices are fixed.
D) Only input prices are flexible.

Question

Which of the following best characterizes prices in the long run, but NOT in the short run?  
A) All prices are flexible. 
B) Prices are NOT flexible. 
C) Some resource prices are fixed. 
D) Only input prices are flexible.

Quizplus · Accepted Answer

In the long run, all prices, including those of goods, services, and inputs (like labor and capital), are flexible. This flexibility allows for adjustments in response to changes in supply and demand, unlike in the short run where some prices might be sticky or fixed due to contracts, menu costs, or other frictions.

Which of the Following Best Characterizes Prices in the Long