Short-run equilibrium exists
A) where the AD curve intersects the short-run aggregate supply (SRAS)curve.
B) where the AD curve intersects the long-run aggregate supply (LRAS)curve.
C) on the AD curve only.
D) on the SRAS curve only.

Question

Quizplus · Accepted Answer

Short-run equilibrium occurs at the point where the aggregate demand (AD) curve intersects the short-run aggregate supply (SRAS) curve. At this point, the quantity of goods and services supplied in the short-run matches the level of aggregate demand in the economy. This point represents a temporary equilibrium, which may be different from the long-run equilibrium where the AD curve intersects the long-run aggregate supply (LRAS) curve.

Short-Run Equilibrium Exists