If Profit Per Unit Equals (Price - Cost Per Unit)

question 5

Multiple Choice

If profit per unit equals (price - cost per unit) and costs are temporarily fixed, then the aggregate supply curve will have

• A)a basic "U" shape.
• B)a negative slope.
• C)a positive slope.
• D)All of the above could be correct.

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Definitions:

Aggregate Demand Curve

A graph showing the total demand for goods and services within an economy at different price levels.

Aggregate Demand

The total demand for all goods and services within an economy at various price levels, over a specific time period.

Price Level

A measure of the average prices of goods and services in an economy at a given time.

Multiplier

The factor by which changes in spending will affect the aggregate income level of an economy; often used in the context of the Keynesian economic multiplier effect.