The Change in Price That Results from a Rightward Shift

question 106

Multiple Choice

The change in price that results from a rightward shift in demand will be greater if

• A) the supply curve is horizontal than if the supply curve is upward sloping.
• B) the supply curve is relatively steep than if the supply curve is relatively flat.
• C) the supply curve is upward sloping than if the supply curve is vertical.
• D) the supply curve is horizontal than if the supply curve is vertical.

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Definitions:

Economic Costs

The total value of all resources used to produce a good or service, including both explicit and implicit costs.

Accounting Profit

The difference between total revenue and explicit costs; it does not account for implicit costs, unlike economic profit.

Total Revenue

The entire amount of income generated by the sale of goods or services before any costs are subtracted.

Economic Costs

The total cost of choosing one action over another, consisting of both explicit costs (direct monetary outlays) and implicit costs (the value of opportunities foregone).