If the price of a product is above equilibrium, what forces it down?
What will be an ideal response?
When the price is above equilibrium, a surplus occurs. Some producers who are unable to sell the product will have an incentive to offer to sell the product at a lower price. A lower price will simultaneously decrease the quantity supplied and increase the quantity demanded. This downward pressure on price continues until the surplus is eliminated and equilibrium is achieved.
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Which Latin American country defaulted on loans in 2005 and paid off their creditors at only 1/3 value?
A) Argentina B) Brazil C) Chile D) Colombia E) Mexico
See the information in Scenario 4.4. Suppose P = 10, Pc = 100, Pd = 2, A = 5, and I = 50. What is the price elasticity of demand?
A) 0 B) -5/9 C) -1 D) -9/5 E) none of the above
Refer to the table below. If Stuffed Pies is currently producing 9 units of quality, to maximize profit, Stuffed Pies should ________ the units of quality.
Stuffed Pies is a frozen calzone manufacturer. The table above summarizes Stuffed Pies' marginal revenue and marginal cost of quality at various quality amounts.
A) increase
B) decrease
C) decrease by 50 percent
D) not change
The market value of ABC Corp, whose securities are publicly traded, can be found by
a. multiplying the price of its stock by the number of shares outstanding b. dividing the number of shares outstanding by the price of the stock c. adding the total value of its outstanding stock to the total value of its outstanding bonds d. subtracting the total value of its outstanding bonds from the total value of its outstanding stock e. subtracting the total value of its outstanding stock from the total value of its outstanding bonds