An Increase in the Demand for a Product Means That

question 45

Multiple Choice

An increase in the demand for a product means that the:

• A) demand curve shifts to the left.
• B) demand curve shifts to the right.
• C) supply curve shifts to the right.
• D) supply curve shifts to the left.
• E) quantity supplied has increased.

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Definitions:

Most Efficient Output

The level of production at which a firm or economy can produce goods at the lowest average cost, maximizing the use of resources.

ATC Curve

The Average Total Cost Curve, which represents the average cost per unit of output over various levels of production, illustrating how costs change with output levels.

AVC Curve

The average variable cost curve, which plots the variable cost per unit of output at different levels of production.

Perfect Competitor's Firm

A company operating in a market where no single firm can influence price, and all firms sell identical products.