Suppose Z Is a Normal Good

question 33

Multiple Choice

Suppose Z is a normal good.The equilibrium price and quantity of Z in the year 2013 was $25 and 60 units,respectively.In 2017,the equilibrium price of Z had increased to $35 and the equilibrium quantity had increased to 70 units.Other things remaining the same,which of the following could explain this change?

• A) A leftward shift of the supply curve of Z
• B) A rightward shift of the supply curve of Z
• C) A leftward shift of the demand curve for Z
• D) A rightward shift of the demand curve for Z

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Definitions:

Zero Economic Profits

A situation where a firm's total revenues exactly equal its total costs, leading to no net profit or loss after considering both explicit and implicit costs.

Normal Profits

An economic condition where a firm's total revenue is equal to its total costs, allowing it to cover all its opportunity costs.

Shutdown Point

The point in business operations where the revenue from the sale of goods or services is equal to the variable costs, beyond which the business would incur losses.

Break-Even Point

An output at which a firm makes a normal profit (total revenue = total cost) but not an economic profit.