Consider the Nature of Macroeconomic Equilibrium

question 36

Multiple Choice

Consider the nature of macroeconomic equilibrium.If,at a particular price level,the total output demanded is greater than that supplied by producers,then

• A)the price level will decline toward its equilibrium value.
• B)the price level will rise toward its equilibrium value.
• C)the aggregate demand curve will shift to the left,re-establishing an equilibrium.
• D)the aggregate supply curve will shift to the right,re-establishing an equilibrium.
• E)the aggregate supply curve will shift to the left,re-establishing equilibrium.

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Definitions:

Marginal Cost Curve

A curve showing how the cost of producing one additional unit of a good varies as the quantity of the good produced changes.

Competitive Price

The price point in a market where supply meets demand, often driven by competition among firms and considered the equilibrium price.

Monopoly Power

The ability of a single supplier to control market prices and exclude competition in a particular market.

Natural Monopolies

Industries where a single firm can supply a product or service to an entire market at a lower cost than two or more firms.