Equilibrium in the Long Run Occurs When

question 39

Multiple Choice

Equilibrium in the long run occurs when:

• A) AD intersects the short-run AS, regardless of output level
• B) AD intersects the short-run AS, regardless of price level
• C) AD intersects the short-run and the long-run AS curves at the same point
• D) The short-run AS curve intersects the long-run AS curve

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Definitions:

Relevant Range

The span within operations that the hypotheses concerning the behavior of variable and fixed costs apply.

Selling Price

The amount for which a product or service is sold to customers, determined by factors such as cost, demand, and competition.

Contribution Margin

The amount of revenue remaining after deducting variable costs, which contributes towards covering fixed costs and generating profit.

Manufacturing Overhead Cost

All indirect costs associated with the production process, including indirect labor, indirect materials, and other overhead expenses not directly tied to the production of specific goods or services.