The Vertical Distance Between a Firm's Total Cost Curve and Its

question 83

Multiple Choice

The vertical distance between a firm's total cost curve and its total variable cost curve

• A)is zero
• B)is negative when the firm incurs fixed costs in the short run
• C)represents total fixed costs
• D)represents marginal costs
• E)represents average fixed costs

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Definitions:

Aggregate Supply Curve

The graphical representation of the total goods and services that producers in an economy are willing to sell at various price levels.

Price Level

The economy-wide average price for the entirety of goods and services produced.

Profit Per Unit

The amount of net income earned by selling one unit of a product, calculated as the sales price minus the cost of production per unit.

Aggregate Supply Curve

A graphical representation that shows the total quantity of goods and services that producers in an economy are willing and able to supply at different price levels.