Refer to the Graph Above

question 89

Multiple Choice

Refer to the graph above. The long-run aggregate supply curve would be represented by which line?

• A) 1
• B) 2
• C) 3
• D) 4

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Definitions:

Elastic

Describes a situation in economics where the demand or supply for a good or service significantly changes in response to a change in price.

Perfectly Inelastic

A situation in market demand or supply where the quantity demanded or supplied does not change regardless of changes in price.

Equilibrium Price

The price at which the quantity of a good or service demanded equals the quantity supplied, leading to a state of balance in the market.

Equilibrium Quantity

The amount of goods or services supplied that is exactly equal to the amount of goods or services demanded at a particular price level.