When prices in the economy have not fully adjusted,we say that
A) we are in the short run.
B) we are in the long run.
C) it is a period of time less than one year.
D) it is a period of time less than five years.
E) the market is not in equilibrium.

Question

Quizplus · Accepted Answer

In the short run, prices have not fully adjusted to changes in supply and demand conditions. The long run, on the other hand, is defined as the period of time in which all prices have fully adjusted to changes in supply and demand. Therefore, when prices in the economy have not fully adjusted, we are in the short run.

When Prices in the Economy Have Not Fully Adjusted,we Say