Brent,a Brilliant Inventor,found a Way to Grind Up Discarded Newspapers

question 30

Multiple Choice

Brent,a brilliant inventor,found a way to grind up discarded newspapers and create a new,far lower-cost,effective plaster.What effect would this innovation have on aggregate supply?

• A)If it is able to replace existing products with its superior characteristics, it will shift SRAS to the right and LRAS to the right.
• B)If it is able to substantially lower the costs of home insulation products, it would shift SRAS to the right but not change the LRAS.
• C)By reducing the demand for existing plaster, it would have no net effect on the SRAS but shift LRAS left.
• D)By providing a readier market to use discarded papers, it would reduce disposal costs for many producers and thereby shift SRAS to the left, leaving LRAS unchanged.

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Definitions:

Firm Decreases Price

A strategic action where a company lowers the selling price of its goods or services to attract more customers or increase sales volume.

Revenue

represents the total amount of income generated by a company from its business activities, such as sales of goods and services, before any expenses are subtracted.

Demand Curves

Curves that describe buyer behavior and tell you how much consumers will buy at a given price.

Consumer

An individual or group who purchases goods or services for personal use.