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Market Equilibrium quiz #3

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  • Local electric or gas utility companies mostly operate in which market structure?
    Natural monopoly.
  • If demand decreased by 4 units at each price, what would the new equilibrium price and quantity be?
    The new equilibrium price and quantity would be lower, as the demand curve shifts left.
  • What happens to oligopolistic firms when a recession occurs?
    Demand decreases, leading to lower equilibrium prices and quantities.
  • If markets are in equilibrium, which of the following conditions will exist?
    No surplus or shortage; quantity supplied equals quantity demanded.
  • In our example, what would be the quantity demanded at a market price of $20?
    The quantity demanded at $20 is found on the demand curve at that price.
  • The equilibrium price is the price at which:
    Quantity supplied equals quantity demanded.
  • At the equilibrium price, quantity equals quantity _______. (Enter only one word per blank.)
    Demanded.
  • The condition AD = AS refers to _______ equilibrium.
    Market.
  • The intersection of demand and supply determines the (one word) price for money.
    Equilibrium.
  • Identify the point where the supply and demand curves intersect.
    The intersection point is the market equilibrium.
  • The interaction between buyers and sellers determines the equilibrium price and the quantity.
    True; market interactions set equilibrium price and quantity.
  • Investors sell stock at the:
    Market equilibrium price.
  • Refer to Figure 7-9. The equilibrium price is:
    The price at which the supply and demand curves intersect in Figure 7-9.
  • Under perfect competition, any profit-maximizing producer faces a market price equal to its:
    Marginal revenue.
  • If a shortage exists in a market, we know that the actual price is:
    Below the equilibrium price.
  • Price where quantity supplied equals quantity demanded is called:
    Equilibrium price.
  • When a shortage is eliminated:
    The market returns to equilibrium.
  • The interaction between buyers and sellers in a market system determines:
    The equilibrium price and quantity.
  • Suppose the New York City housing market is in equilibrium. What does this mean?
    It means quantity of housing supplied equals quantity demanded.
  • Refer to Table 4-6. The equilibrium price and quantity, respectively, are:
    The price and quantity where supply equals demand in Table 4-6.
  • What happens to the equilibrium price and quantity when demand decreases while supply remains constant?
    When demand decreases and supply remains constant, the equilibrium price and quantity both decrease.
  • What does the law of supply and demand state about market prices?
    The law of supply and demand states that the price of a good adjusts so that the quantity supplied equals the quantity demanded.
  • What is the term for the point where the supply and demand curves intersect and prices are determined?
    The point where supply and demand curves intersect and prices are determined is called market equilibrium.
  • In a free market, what do supply and demand determine?
    In a free market, supply and demand determine the equilibrium price and quantity of goods and services.
  • How are supply and demand related in determining market outcomes?
    Supply and demand interact to determine the equilibrium price and quantity in a market; as demand increases or supply decreases, prices tend to rise, and vice versa.
  • What is the significance of the point at which supply and demand meet in a market?
    The point at which supply and demand meet represents the market equilibrium, where the quantity supplied equals the quantity demanded.
  • What is the name for the point at which the quantity supplied equals the quantity demanded?
    The point at which the quantity supplied equals the quantity demanded is called equilibrium.
  • What is the market outcome when supply and demand come together at a specific price and quantity?
    When supply and demand come together at a specific price and quantity, the market reaches equilibrium.
  • How do supply and demand influence the market price of a good?
    Supply and demand influence the market price by determining the equilibrium price; if demand increases or supply decreases, the price tends to rise, and if demand decreases or supply increases, the price tends to fall.
  • How do supply and demand interact to set prices in a market?
    Supply and demand interact to set prices by moving toward an equilibrium where the quantity supplied equals the quantity demanded, resulting in a stable market price.