If a surplus exists in the market for swimwear, an economist would predict that
a. the price of swimwear will rise
b. producers will increase the production of swimwear
c. the supply of swimwear will increase
d. the price of swimwear at retail outlets will begin to fall
e. buyers will react to the surplus by increasing their demand for swimwear
D
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Explain the characteristics of monopolistic competition. Explain how price and output are determined in monopolistic competition. Illustrate your answer with a graph
What will be an ideal response?
Equilibrium takes place where:
A. supply and demand intersect. B. supply is highest. C. demand is highest. D. prices are maximized.
Other things equal, the demand for a good tends to be more inelastic, the
a. fewer the available substitutes. b. longer the time period considered. c. more the good is considered a luxury good. d. more narrowly defined is the market for the good.
Figure 4-6
The deadweight loss of the tax illustrated in is given by the area
a.
ABEH.
b.
DFE.
c.
EKG.
d.
EFG.