The cobweb theorem explains why farms prices:
A) may never reach an equilibrium level if the demand and supply elasticities are not identical.
B) may never reach an equilibrium level if the demand and supply elasticities are identical.
C) always reach an equilibrium level when price elasticity of demand exceeds that of supply.
D) always reach an equilibrium level when price elasticity of supply exceeds that of demand.
Correct Answer:
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