-In the Figure Above,as the Price Level Increases,the Aggregate Demand

question 118

Multiple Choice

-In the figure above,as the price level increases,the aggregate demand curve will

• A)shift from AD₁ to AD₃ and then back to AD₁.
• B)not shift,but the aggregate demand curve will change so that it is positively sloped.
• C)not shift.
• D)shift from AD₁ to AD₃.
• E)shift from AD₁ to AD₂.

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Definitions:

Economies of Scale

The cost advantage that arises with increased output of a product, resulting from efficiencies in production processes.

Total Cost

The complete sum of all expenses incurred in the production and delivery of a product or service, including fixed and variable costs.

Research and Development Costs

Expenses associated with the research and development activities of a company, aiming at new product development and improvement of existing products.

Economies of Scale

Cost advantages that a business can achieve due to an increase in the scale of production, leading to lower per-unit costs.