Economics and Business: Market Equilibrium

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What is the primary goal of sellers in the given market scenario?

To offer goods at lower prices than the market average (correct)

To maintain high prices and restrict supply

To adapt to market equilibrium and stabilize prices

To undercut competitors and capture market share

What is the characteristic of the market structure in the given scenario?

Monopoly with a single supplier

Monopolistic competition with differentiated products

Oligopoly with few dominant firms

Perfect competition with many buyers and sellers (correct)

What is the expected outcome of sellers' pricing strategies in this market?

Prices will decrease as sellers try to undercut each other (correct)

Prices will fluctuate wildly as sellers react to market changes

Prices will increase as sellers try to maximize profits

Prices will remain stable as sellers maintain market share

What can be inferred about the market demand in this scenario?

Demand is highly elastic and responsive to price changes Signup and view all the answers

What is the role of lowes.com in this market scenario?

A retailer that competes with other sellers on price Signup and view all the answers

What happens to the demand when there is a change in income?

There is a proportional change in demand Signup and view all the answers

What is the relationship between demand and price?

Demand is directly proportional to price Signup and view all the answers

What is the effect of a change in quota on demand?

Demand decreases when quota is imposed Signup and view all the answers

What is the term for a good or service whose demand is directly proportional to the percentage change in its price?

Perfectly elastic Signup and view all the answers

What happens to demand when there is a change in the population?

Demand increases when population increases Signup and view all the answers

What is the primary goal of food regulation at prices?

To control the change in quantity demanded due to price changes Signup and view all the answers

What is the term that describes the responsiveness of quantity demanded to a change in price?

Price elasticity Signup and view all the answers

What is the consequence of a change in price on the quantity demanded?

It causes a change in the quantity demanded Signup and view all the answers

What is the purpose of setting a minimum wage?

To protect the interests of workers Signup and view all the answers

What is the relationship between the change in price and the change in quantity demanded?

Inversely proportional Signup and view all the answers

What is the relationship between two goods when their price elasticity of demand is positive?

They are perfect substitutes Signup and view all the answers

If the income elasticity of demand for a good is between 0 and 1, what type of good is it?

Necessity good Signup and view all the answers

What is the sign of the price elasticity of demand for an inferior good?

Negative Signup and view all the answers

What happens to the demand for a good when there is a change in income, and the income elasticity of demand is positive?

The demand for the good increases Signup and view all the answers

What is the relationship between the price of two goods when their cross-price elasticity of demand is negative?

They are complementary goods Signup and view all the answers

What is the primary motivation for consumers to make decisions about purchasing goods?

To maintain the same level of utility Signup and view all the answers

What is the assumption about the goods being exchanged in the market?

They are perfect substitutes Signup and view all the answers

What is the concept that describes the idea of consuming goods in exchange for another good while maintaining the same level of utility?

Exchange at the Margin Signup and view all the answers

What is the term used to describe the level of satisfaction or utility that a consumer derives from consuming a good or service?

Marginal Utility Signup and view all the answers

What is the market structure that allows consumers to satisfy their wants by consuming goods that provide a certain level of utility?

Perfect Competition Signup and view all the answers