If Price Is Initially Above the Equilibrium Level

question 30

Multiple Choice

If price is initially above the equilibrium level,

• A) the supply curve will shift rightward.
• B) the supply curve will shift leftward.
• C) excess supply exists.
• D) all firms can sell as much as they want.

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Definitions:

Variable Costs

Costs that vary in total dollar amount as the level of activity changes.

Short-Run Price

The price level of goods or services in a market that is determined over a short period, where some costs can be considered fixed.

Special Price

A discounted rate offered for a product or service outside of its standard pricing.

Differential Cost

The difference in total cost that will result from selecting one alternative over another in decision-making processes.