Refer to the Graph Shown

question 38

Multiple Choice

Refer to the graph shown. If the price level is P₁ the:

• A)short-run aggregate supply curve will shift up (to the left)in the long run to restore equilibrium.
• B)short-run aggregate supply curve will shift down (to the right)in the long run to restore equilibrium.
• C)aggregate demand curve will shift to the left in the long run to restore equilibrium.
• D)aggregate demand curve will shift to the right in the long run to restore equilibrium.

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Definitions:

Expected Costs

Anticipated or forecasted costs for a project, activity, or production based on historical data, current conditions, and future projections.

Total Fixed Cost

The aggregate sum of all expenses within a company that remain constant regardless of the level of production or sales.

Fixed Cost Per Period

Costs that do not vary with the level of production or sales within a certain range and time frame, such as rent or salaries.

Mixed Cost

A cost that contains both variable and fixed cost elements and changes in total with the level of activity, but not proportionately.