The Long-Run Aggregate Supply Curve at the Potential Level of Real

question 89

Multiple Choice

The long-run aggregate supply curve at the potential level of real GDP is a(n)

• A) horizontal line.
• B) upward-sloping curve.
• C) downward-sloping curve.
• D) vertical line.
• E) combination of a horizontal line, an upward-sloping curve, and a vertical line.

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Definitions:

Marginal Cost

The hike in production costs when an additional unit of a good or service is manufactured.

Market Price

The existing selling or buying price for a service or asset in a particular trading environment.

Economic Profit

The total revenue of a business minus its total costs, including both explicit and implicit costs.