Figure 23-2.
-Refer to Figure 23-2.Point B represents
A) a short-run equilibrium and a long-run equilibrium.
B) a short-run equilibrium but not a long-run equilibrium.
C) a long-run equilibrium but not a short-run equilibrium.
D) neither a short-run equilibrium nor a long-run equilibrium.

Question

Figure 23-2. 
-Refer to Figure 23-2.Point B represents
A) a short-run equilibrium and a long-run equilibrium. 
B) a short-run equilibrium but not a long-run equilibrium. 
C) a long-run equilibrium but not a short-run equilibrium. 
D) neither a short-run equilibrium nor a long-run equilibrium.

Quizplus · Accepted Answer

Point B represents a short-run equilibrium as AS and AD intersect, but it does not represent a long-run equilibrium as the intersection of AS and AD is not at potential output (the LRAS curve) indicating that the economy is not producing at its full capacity in the long run.

Figure 23-2. -Refer to Figure 23-2.Point B Represents