-In the Above Figure, If a Is the Initial Equilibrium

question 180

Multiple Choice

-In the above figure, if A is the initial equilibrium point and there is an unanticipated rise in aggregate demand from AD₁ to AD₂, then

• A)the new short-run equilibrium will be at point B.
• B)the new long-run equilibrium will be at point B.
• C)the new short-run equilibrium will be at point D.
• D)real Gross Domestic Product (GD
• P)per year will fall below Y₁.

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Definitions:

Total Fixed Costs

Financial obligations that do not fluctuate with the amount of goods made or sold, for instance, rent, salaries, and insurance coverage.

Unit Fixed Costs

Unit Fixed Costs are the costs that do not change with the volume of production and are allocated per unit based on the total production quantity.

Total Variable Cost

Charges that fluctuate in direct relation to the volume of production or output.

Merchandising Company

A Merchandising Company is a business that purchases finished products and sells them at a profit, without altering the products themselves.