An Increase in Regulation Will Shift the Aggregate

question 13

Multiple Choice

An increase in regulation will shift the aggregate:

• A) demand curve leftward.
• B) supply curve rightward.
• C) supply curve leftward.
• D) demand curve rightward.

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Definitions:

Economic Profit

The profit a business makes after deducting both its explicit and implicit costs, not just its operational expenses.

Profit Maximizing

A process by which a firm determines the price and output level that returns the greatest profit.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, or loan payments.

Short-Run Profit

The profit earned by a firm in the short term, typically considering only variable costs and fixed costs remaining constant.