If the Short-Run Supply Curve and the Demand Curve Intersect

question 17

Multiple Choice

If the short-run supply curve and the demand curve intersect below the long-run supply curve,firms will experience ________ economic profits,meaning the price is ________ the minimum point on the average total cost curve.

• A) positive; above
• B) positive; below
• C) negative; above
• D) negative; below
• E) zero; above

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Definitions:

Timeplot

A graphical representation of how a variable changes over time, displaying data points connected by lines to show trends or patterns.

Annual Profits

The net earnings of a company over a one-year period after all expenses have been deducted from its total revenue.

Distribution

In statistics, the way in which values of a variable or a set of variables spread out across a data set or population.

Government Workers

Individuals employed by federal, state, local, or international government agencies.