When the price of a specific product increases, individual firms can generally expand their output by a

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When the price of a specific product increases, individual firms can generally expand their output by a larger amount in the long run than in the short run. For the economy as a whole, however, an unexpected increase in the price level leads to a larger expansion in output in the short run than in the long run. Can you explain this apparent paradox?

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Macroeconomics Private And Public Choice

ISBN: 9780538754286

13th Edition

Authors: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

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