18 Questions
What point represents market equilibrium?
C
In a market, why do all sales and purchases take place at the same price?
There is a uniform price in well-established markets.
What happens if the market price is above the equilibrium price?
The quantity supplied exceeds the quantity demanded.
What will sellers do if there is a surplus in the market?
Reduce the price
If the market price falls below the equilibrium price, what will happen?
There will be a shortage
What occurs when there is a surplus of a good in the market?
Sellers reduce prices to sell excess goods
What is the condition for a market to be in equilibrium?
Quantity supplied equals quantity demanded
Why does the price that wholesale cotton farmers receive end up being less than the price paid by retail cotton buyers?
Middlemen reduce the price for their efforts
What happens to the market price if the quantity demanded exceeds the quantity supplied?
The market enters a state of shortage
How do changes in the number of producers entering and exiting the market affect overall supply?
Increase in overall supply
In what scenario would consumer surplus be maximized?
When prices are higher than equilibrium
What happens to producer surplus if producers anticipate a decrease in future prices?
Producer surplus decreases
If consumers are willing to pay more than the equilibrium price, what economic concept are they benefiting from?
Consumer surplus
What happens to consumer surplus if the equilibrium price falls below what consumers are willing to pay?
It decreases
If garden gnomes regain popularity, what is the most likely effect on the equilibrium price and quantity?
Both rise
If the cost of wood falls, what would be the impact on the equilibrium price and quantity in the violin market?
Price falls and quantity rises
When producers are willing to sell at a price lower than the equilibrium price, which concept are they benefiting from?
Producer surplus
What is the likely outcome for consumer surplus if the supply curve shifts to the left?
It increases
Learn how sellers adjust their offerings based on future price expectations and how the overall supply changes with the entry and exit of producers. This quiz explores individual and market supply curves in relation to price determination.
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