The Long Run Aggregate Supply Curve Shows That Prices Are

question 36

True/False

The long run aggregate supply curve shows that prices are constant at any level of output, and is therefore horizontal.

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Definitions:

Willingness to Pay

The maximum amount an individual is prepared to spend on a good or service, reflecting its perceived value.

Price

Price is the amount of money that must be paid to acquire a good or service.

Consumer Surplus

The gap between what consumers are ready and able to spend for a good or service and the actual amount they pay.

Willingness to Pay

The maximum amount an individual is prepared to expend on a good or service, reflecting the value they place on it.