Figure 14.1
-In Figure 14.1,which of the points are possible long-run equilibriums?

Question

Figure 14.1 
-In Figure 14.1,which of the points are possible long-run equilibriums?

Quizplus · Accepted Answer

Points A and C are unstable equilibriums (also known as saddle points), meaning that if you deviate slightly from these points, the system will move away from them. Point D is a stable equilibrium, but it is not a long-run equilibrium as it is not feasible or sustainable in the long-term. Point B, however, is a stable long-run equilibrium where the system will naturally tend towards and stay at in the long-term.

Figure 14.1 -In Figure 14.1,which of the Points Are Possible Long-Run Equilibriums