A market is in equilibrium:
A. provided there is no surplus of the product.
B. at all prices above that shown by the intersection of the supply and demand curves.
C. if the amount producers want to sell is equal to the amount consumers want to buy.
D. whenever the demand curve is downsloping and the supply curve is upsloping.
Answer: C
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Which of the following will increase a perfectly competitive seller's short-run supply and shift the firm's short-run supply curve rightward?
A) an increase in the market price B) a decrease in average fixed costs C) a decrease in marginal cost D) Both answers A and B are correct. E) Both answers A and C are correct.
What is marginal cost?
a. the change in total costs resulting from a one-unit change in output b. a per-unit measure of costs that change with the level of output c. an estimate of the per-unit value of the best alternative not pursued d. a cost counted toward economic profits but not accounting profits
Explain the income and substitution effects and use the concepts to describe what happens when the price of a product decreases
Please provide the best answer for the statement.
Assume the watermelon industry is perfectly competitive and in long-run equilibrium with a market price of $10. If the demand for watermelons increases in this decreasing-cost industry, long-run equilibrium will be reestablished at a price
A. less than $10. B. equal to $10. C. greater than $10. D. either greater than or less than $10, depending on the number of firms that enter the industry.