Suppose an economy is in medium-run equilibrium. Now the government enacts a law, making entry of new firms difficult, which increases the monopoly power of the existing firms. Which of the following statements are true about this change?
(A) Output level will be lower in medium-run
(B) Output level will be lower in short-run
(C) Price level will be higher in medium-run
(D) Price level will be higher in short-run
Choose the correct answer from the options given below:
1
(A) and (C) Only
2
(B), (C) and (D) Only
3
(B) and (C) Only
4
(A), (B) (C) and (D) Only