In a free market, what happens if there is a surplus? The price ________.
a. falls
b. rises
c. stays the same
d. rises in the short run and falls back to its original level in the long run
Answer: a. falls
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An upscale fusion bistro in a small town charges higher prices for the same menu items at dinner time than at lunch time. Does the bistro necessarily practice price discrimination?
Explain your answer
Which of the following is FALSE?
a. The Robinson-Patman act is a part of the antitrust laws b. Under the Robinson-Patman act it is illegal to give a price discount on goods sold to another business c. Under the Robinson-Patman act, it is illegal to give a price discount on goods sold to final customers d. Under the Robinson-Patman act, the only discount allowed is the one based on difference in servicing costs of different groups
Picture a linear downward-sloping demand curve. If the price continues to fall, price elasticity will
a. decrease b. increase c. remain unchanged d. approach infinity e. increase or decrease, depending on the character of the good
If a firm earns short-run losses, it exits in the long run.
Answer the following statement true (T) or false (F)