Market Equilibrium quiz #1 Flashcards
Market Equilibrium quiz #1
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At which price does the graph show the market equilibrium point: $6, $9, $12, or $15? The equilibrium point is at the price where the supply and demand curves intersect, which is typically indicated on the graph. What is the price at which the intentions of buyers and sellers match? The price at which buyers' intentions to purchase and sellers' intentions to sell match is called the equilibrium price. How many goods must be supplied to achieve market equilibrium: 15, 20, 25, or 30? The equilibrium quantity is the amount supplied where the supply and demand curves intersect, as shown on the graph. At what price is market equilibrium achieved: $8, $9, $10, or $30? Market equilibrium is achieved at the price where quantity demanded equals quantity supplied. What determines market price and equilibrium output in a market? Market price and equilibrium output are determined by the intersection of the supply and demand curves. Where is the equilibrium point located on a supply and demand graph? The equilibrium point is where the supply and demand curves intersect. What is the point at which supply and demand intersect called? The point where supply and demand intersect is called the equilibrium point. How is the value of a product determined in a market? The value of a product is determined by the interaction of supply and demand, which sets the equilibrium price. What is the equilibrium price in a market? The equilibrium price is the price at which quantity demanded equals quantity supplied. What is the relationship between quantity demanded and quantity supplied at equilibrium? At equilibrium, quantity demanded equals quantity supplied. What does the intersection between the demand and supply curves show? The intersection shows the market equilibrium price and quantity. Which point on the graph indicates the lowest quantity supplied of goods? The lowest quantity supplied is shown at the leftmost point on the supply curve. Which of the following is the formula to determine market share? Market share = (Firm's sales / Total market sales) × 100. Which of the following sources of market inefficiency would be most easily exploited? Market inefficiencies such as information asymmetry can be most easily exploited. What can cause the market equilibrium price of peanut butter to increase? A decrease in supply or an increase in demand can cause the equilibrium price to increase. At what price does a natural monopoly meet market demand? A natural monopoly meets demand at the price where its supply curve intersects the market demand curve. The place where the supply curve intersects the demand curve is known as which of the following? It is known as the market equilibrium point. If Sidney Airlines is currently breaking even, what does this indicate about its market position? Breaking even means Sidney Airlines is operating at the equilibrium price and quantity, with no economic profit. Which statement about supplier power in the airline industry is true? Supplier power is higher when there are few suppliers and low competition among them. What price will a firm charge in a competitive market? A firm will charge the market equilibrium price. In which situation are buyers capable of taking advantage of sellers? Buyers can take advantage when there is a surplus and sellers must lower prices to sell goods. Given the conditions of demand and supply in the table below, what is the equilibrium price? The equilibrium price is where quantity demanded equals quantity supplied in the table. What will happen to a firm if it continues to produce the same products in a saturated market? The firm may experience declining sales and profits due to excess supply and low demand. Refer to Table 14-1. Over which range of output is average revenue equal to price? In perfect competition, average revenue equals price at all output levels. If markets are in equilibrium, what does this imply? It implies that quantity supplied equals quantity demanded and there is no surplus or shortage. Which scenario is closest to equilibrium (zero surplus/shortfall)? The scenario where quantity supplied equals quantity demanded is closest to equilibrium. Which of the following will increase the supply of loanable funds? An increase in savings or number of savers will increase the supply of loanable funds. Refer to Table 10-1. What is the equilibrium quantity of output in the market? The equilibrium quantity is where quantity demanded equals quantity supplied in the table. What is the equilibrium world price? The equilibrium world price is the price at which global quantity demanded equals quantity supplied. Refer to Figure 13-3. Which of the points in the graph are possible long-run equilibria? Long-run equilibria occur where the market supply and demand curves intersect at a stable price and quantity. Refer to Figure 10-3. What is the socially optimal quantity of output in this market? The socially optimal quantity is where marginal social benefit equals marginal social cost. At what price will the stock reach an equilibrium at which it is perceived as fairly priced today? The stock reaches equilibrium at the price where supply equals demand in the market. Refer to Figure 10-3. What is the equilibrium price in this market? The equilibrium price is where the supply and demand curves intersect in the figure. Refer to Table 14-15-a. What is the lowest price at which this firm would operate in the short run? The lowest price is the one that covers the firm's average variable cost. What is the equilibrium quantity? (Please answer in millions per year) The equilibrium quantity is the amount where supply equals demand, as shown in millions per year on the graph or table. A decrease in the supply of loanable funds will cause what? A decrease in supply will increase the equilibrium interest rate and decrease the quantity of loanable funds. Which of these is correct about the market for Red Delicious apples? The market equilibrium is reached where the supply and demand for Red Delicious apples are equal. Refer to the figure. If the equilibrium price is $40, what does this indicate? It indicates that at $40, quantity supplied equals quantity demanded. What is market information? Market information refers to data about prices, supply, demand, and other factors affecting market equilibrium. What needs to happen in order to stop disequilibrium from occurring? Prices must adjust so that quantity supplied equals quantity demanded, restoring equilibrium.
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