An Event That Directly Affects Firms' Costs of Production and Thus

question 52

Multiple Choice

An event that directly affects firms' costs of production and thus the prices they charge is called

• A)a Phillips contraction.
• B)an inflationary spiral.
• C)a demand shock.
• D)a supply shock.

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Definitions:

Total Revenue

The total income generated from the sale of goods or services before any expenses are subtracted.

Long Run

An economic period in which all inputs, including capital, can be adjusted, allowing firms to fully adapt to market changes.

Output

The total amount of goods and services produced by an economy or a production process over a certain period of time.

Marginal Cost

The cost of producing one additional unit of a product or service, which varies depending on the level of production.