Which of the Following Is True in the Short Run

question 124

Multiple Choice

Which of the following is true in the short run?

• A)The aggregate supply curve is horizontal.
• B)The aggregate supply curve is vertical.
• C)Per-unit costs do not increase as much as output prices when the price level rises.
• D)An increase in price per unit results in a decrease in profit per unit.
• E)Firms' total costs of production decrease as output expands beyond the potential level.

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Definitions:

Mutually Exclusive

situations or events that cannot occur at the same time.

Internal Rate of Return

The Internal Rate of Return (IRR) is a metric used in capital budgeting to estimate the profitability of potential investments.

Required Rate

The minimum return an investor expects to achieve by investing in a project, often used as a benchmark to evaluate financial investments.

Rule

A prescribed guideline or regulation for conduct, action, or the operation of systems.