In a perfectly competitive market, why can’t prices above the competitive equilibrium price prevail in the long run? Sellers will use market power created by shortage to push prices down Sellers will use market power created by surplus to push prices down Buyers will use market power created by shortage to push prices down Buyers will use market power created by surplus to push prices down

Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter9: Market Structure And Long-run Equilibrium
Section: Chapter Questions
Problem 10MC
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In a perfectly competitive market, why can’t prices above the competitive equilibrium price prevail in the long run?

 

  • Sellers will use market power created by shortage to push prices down
  • Sellers will use market power created by surplus to push prices down
  • Buyers will use market power created by shortage to push prices down
  • Buyers will use market power created by surplus to push prices down
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