Refer to the accompanying figure. Suppose all the sellers in this market started out charging a price of $45 per unit. What is the most likely result?
A. They would lower their prices because at $45 there would be excess demand.
B. They would all make a large profit because $45 is more than the equilibrium price.
C. They would lower their prices because at $45 there would be excess supply.
D. They would all just break even because $45 is their reservation price.
Answer: C
You might also like to view...
Refer to the figure above. If the government was to auction quota licenses competitively, it could earn up to
A) $2000. B) $5000. C) $6000. D) $10000.
If disposable income were to rise from $4,000 to $5,000
A. induced consumption would fall. B. induced consumption would stay the same. C. induced consumption would rise. D. there is not enough information to determine whether induced consumption would rise, fall or remain the same.
In a simplified system where all banks have uniform reserve requirements and checkable deposits are the only form of money, the money multiplier is equal to 1 over the required reserve ratio
a. True b. False Indicate whether the statement is true or false
Recall the Application about the link between happiness and GDP to answer the following question(s). Comparing changes in happiness to changes in per capita income over the last 30 years, economists at Dartmouth College and Warwick University have measured levels of happiness in the United States and United Kingdom based on income levels, ethnicity, age, and gender.According to the Application, large increases in per capita income in the United States over the past 30 years have:
A. had the greatest impact on retired people. B. not increased happiness levels. C. led to a higher divorce rate. D. lowered stress levels.