In a Simple Graphical Model of the Supply and Demand

question 19

Multiple Choice

In a simple graphical model of the supply and demand for pizza with the price of pizza measured vertically and the quantity of pizza measured horizontally:

• A) the supply curve slopes upward and to the right.
• B) the demand curve slopes upward and to the right.
• C) the supply curve slopes downward and to the right.
• D) at the equilibrium price, the supply of pizza exceeds the demand for pizza.

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Definitions:

TR > TC

A situation where total revenue (TR) is greater than total costs (TC), indicating a company is making a profit from its operations.

Short Run

A period in which at least one of a firm's inputs is fixed, limiting its capacity to adjust its output levels.

Long Run

A period of time in which all factors of production and costs are variable, allowing firms to adjust all inputs.

Marginal Cost

The cost of producing one additional unit of a good or service.