Practice Questions
Click any question to see detailed solutions
What happens to the market equilibrium price if there is an increase in demand while supply remains constant?
When demand rises, more buyers want the same amount of goods. Other options are incorrect because The idea that the price would fall is wrong; Thinkin...
What happens to the equilibrium price of a good when there is a decrease in demand while supply remains constant?
When demand falls, the demand curve moves left. Other options are incorrect because Some think that less demand makes sellers raise prices to cover co...
How does an increase in the price of a good affect its market equilibrium when the demand for that good is inelastic?
When the price goes up, people still buy almost the same amount because the good is needed or has few substitutes. Other options are incorrect because...
In a perfectly competitive market, how does an increase in consumer income affect the equilibrium price and market efficiency when the demand curve shifts to the right?
Demand rises when people have more money. Other options are incorrect because Some think that more demand pushes the price down because sellers think ...
In a perfectly competitive market, how does a decrease in production costs affect the supply curve and the resulting producer surplus, considering market efficiency?
When production costs fall, firms can make each unit cheaper. Other options are incorrect because The mistake is thinking that cheaper costs make firm...
What is the likely outcome if the price of a product is set above the market equilibrium price?
When the price is higher than the equilibrium, sellers want to sell more because the price is attractive. Other options are incorrect because Some thi...
Demand : Price :: Supply : ?
When demand goes up, sellers raise the price to balance the market. Other options are incorrect because People often think the whole market changes, b...
Which of the following statements accurately describe the dynamics of market equilibrium? Select all that apply.
When supply rises while demand stays the same, sellers have more goods to sell. Other options are incorrect because Equilibrium means quantity demande...
Arrange the following steps in the correct order to analyze market equilibrium when a new product is introduced: A) Identify shifts in demand and supply curves, B) Determine the new equilibrium price and quantity, C) Assess consumer preferences and potential market size, D) Analyze the impact of external factors on supply and demand.
First you look at who might buy the product and how many people want it. Other options are incorrect because This order starts with supply and demand ...
If the demand for a product increases while supply remains constant, what is likely to happen to the market equilibrium price?
When more people want the product but the amount available stays the same, sellers notice that buyers are willing to pay more. Other options are incor...
A local coffee shop finds that every time they increase the price of their coffee, they sell fewer cups. However, they notice that when a new café opens nearby and offers lower prices, their sales drop even more. What principle of market equilibrium is demonstrated in this scenario?
When the price goes up, people buy less. Other options are incorrect because People often think that price changes only affect how much producers make...
A new technology reduces the cost of production for a popular smartphone. How does this change affect the market equilibrium for smartphones?
When the new technology cuts production costs, producers can make more phones for the same price. Other options are incorrect because A leftward shift...
In market equilibrium analysis, the point where the quantity demanded equals the quantity supplied is known as the __________.
When buyers want exactly as many goods as sellers offer, the market settles at a single price. Other options are incorrect because Many think the gene...
If a sudden increase in consumer income leads to a higher quantity demanded for luxury goods, what is the underlying cause of this change in market equilibrium?
More money lets people buy more luxury items. Other options are incorrect because Some think a smaller supply makes buyers want more; Others think a l...
Master Market Equilibrium Analysis
Ready to take your understanding to the next level? Access personalized practice sessions, progress tracking, and advanced learning tools.