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In which Marshallian time period do ALL factors of production become variable, allowing supply to fully adjust to demand?
AVery short period
BShort period
CLong period
DSecular period
Answer & Solution
Correct answer: C. Long period
1. In the long period all factors become variable and supply can change by altering the scale of production.
2. This lets supply be fully adjusted to changes in demand, fixing the long run normal price.
3. In the short period only variable factors can be adjusted, so it is ruled out.
4. Therefore the long period is correct.
_Source: ICAI BoS CA Foundation Paper 4 Business Economics, Ch 4 Unit I "Meaning and Types of Markets", p.3_
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