Economists have said that deregulation of the electric utility industry might lead to increased prices in the short run but prices will fall in the long run.In this context:
A)the short run means the middle of next year.
B)the short run means after all adjustments have been made and the quantities of all resources have been varied as necessary.
C)the long run means after all adjustments have been made,the quantities of all resources have been varied as necessary,and new market entrants begin producing electricity.
D)the short run means after new firms begin producing electricity.
E)the long run means approximately ten years.

Question

Quizplus · Accepted Answer

The long run in this context refers to a period of time after all necessary adjustments have been made and new market entrants have entered the market to produce electricity. This is a reasonable timeline given the complexity of the industry and the time it would take for new investments and competition to emerge. The short run cannot be associated with a specific time frame like the middle of next year or after new firms begin producing electricity because it relies on the adjustment of all resources and factors in the industry.

Economists Have Said That Deregulation of the Electric Utility Industry