According to New Classical School of Economics, the Aggregate Supply

question 79

Multiple Choice

According to new classical school of economics, the aggregate supply curve is:

• A)horizontal in both the short run and the long run.
• B)vertical in the short run and upward-sloping in the long run.
• C)upward-sloping in both the short run and the long run.
• D)vertical in both the short run and the long run.
• E)upward-sloping in the short run and vertical in the long run.

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Definitions:

Break-Even Sales

The amount of revenue required to cover the total fixed and variable costs of a business.

Contribution Margin

The difference between the sales revenue of a company and its variable costs, indicating how much contributes to covering its fixed costs and generating profit.

Sales Volume

The total quantity of sales or units sold within a particular time frame.

Break-Even Point

The point at which total costs equal total revenues, meaning the business is not making a profit or a loss.