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Author Question: The figure above shows short-run cost curves for a perfectly competitive firm. If the price of the ... (Read 51 times)

Redwolflake15

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on: Jun 29, 2018
The figure above shows short-run cost curves for a perfectly competitive firm. If the price of the product is 8 and the firm does not shut down, the firm's output in the short run
 
  A) will be 0.
  B) will be between 0 and 10.
  C) will be 10 or higher.
  D) cannot be determined without more information.

Question 2

What are fiscal and monetary policies? Do they have an immediate effect on the AD curve or the SAS curve?
 
  What will be an ideal response?


mcomstock09

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Reply #1 on: Jun 29, 2018
Answer to Question 1

B

Answer to Question 2

Fiscal policy is defined as changes in government spending and taxation to affect the level of economic activity. Monetary policy consists of changing interest rates and changing the quantity of money in the economy in order to affect the level of economic activity. Both policies have an impact on the AD curve.


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