Mastering Supply and Demand
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Questions and Answers

What does the supply schedule depict graphically?

  • The relationship between the price of a good and the quantity demanded by consumers
  • The relationship between the price of a good and the cost of raw materials
  • The relationship between the price of a good and the quantity supplied by producers (correct)
  • The relationship between the price of a good and the average revenue of producers

    • How does a rise in the cost of raw materials affect supply?

  • It increases supply, shifting the supply curve to the right
  • It has no effect on supply
  • It decreases supply, shifting the supply curve to the left (correct)
  • It causes the supply curve to become vertical

    • In a competitive market, what determines supply?

  • Average cost
  • Fixed cost
  • Marginal cost (correct)
  • Total cost

    • What must happen for producers to supply a given quantity when the cost of production increases?

    <p>The price must rise</p> Signup and view all the answers

    What does the supply and demand model postulate in a competitive market?

    <p>The unit price for a particular good will vary until quantity demanded equals quantity supplied</p> Signup and view all the answers

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