A Supply Curve That Is a Vertical Straight Line Indicates

question 244

Multiple Choice

A supply curve that is a vertical straight line indicates that

• A)production costs for this product cannot be calculated.
• B)the relationship between price and quantity supplied is inverse.
• C)a change in price will have no effect on the quantity supplied.
• D)an unlimited amount of the product will be supplied at a constant price.

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Definitions:

Money Supply

At any given time, the total economic assets available in an economy, which consist of cash, coins, and the balances in checking and savings accounts.

Long Run

A period of time sufficient for all inputs in the production process to be adjusted, including both fixed and variable resources.

Short-Run Equilibrium

A state in which market supply equals market demand at a particular price level, but where all factors of production and costs are not fully adjustable.

Long-Run Equilibrium

A state in which economic forces such as supply and demand are balanced and in the absence of external influences the values of economic variables will not change.