A supply curve can be thought of as
a. a graphical display of "market potential."
b. a graphical representation of the information in a supply schedule.
c. showing the maximum quantities that firms are able to produce.
d. a forecasting tool.
e. All of the above are correct.
b
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To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change. B. increase. C. decrease. D. either increase or decrease depending on the relative shifts of AD and AS.
Suppose that demand for a product falls, but prices are sticky. What is likely to happen to prices and output in that market, in the short run?
What will be an ideal response?
China has developed a comparative advantage in the production of clothing. The source of this comparative advantage is
A) investment in capital used to produce clothing. B) a large supply of natural resources. C) a large supply of unskilled workers and relatively little capital. D) superior process technology.
The price elasticity of demand coefficient for gourmet coffee is estimated to be equal to 1.6 . It is expected, therefore, that a 10% increase in price would lead to:
a. a 16% decrease in the quantity of gourmet coffee demanded. b. a 16% increase in the quantity of gourmet coffee demanded. c. an 8% decrease in the quantity of gourmet coffee demanded. d. an 8% increase in the quantity of gourmet coffee demanded.