In the context of aggregate supply, the long run is defined as the period during which
A) some prices are set by contracts and cannot be adjusted.
B) prices can change, but neither aggregate supply nor aggregate demand can shift.
C) individuals have sufficient time to modify their behavior in response to price changes.
D) quantity changes cannot occur in response to changes in relative prices.

Question

Quizplus · Accepted Answer

In the long run, individuals and firms have enough time to adjust their behavior and production decisions in response to changes in prices, leading to a situation where all prices, including wages, are flexible.

In the Context of Aggregate Supply, the Long Run Is