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1. Supply and demand show the relationships between two main variables, price and quantity. How are they depicted in demand, and in supply? What other factors impact the relationships between price and quantity in supply and demand? 

2.If a market is in equilibrium, is it necessarily true that all buyers and sellers are satisfied with the market price? Briefly explain.

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Anne Gillian Duero
Anne Gillian DueroLv10
28 Sep 2019

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Related questions

If the market price is kept below the equilibrium price by a regulation, what does the demand and supply model predict about the gap between quantity demanded and quantity supplied? If, in the real world, there is a gap between quantity demanded and quantity supplied, does it necessarily imply that a regulation is keeping the market price below the equilibrium price?

If a market is in equilibrium, is it necessarily true that all buyers and all sellers are satisfied with the market price? Briefly explain

** my thoughts, while I am not entirely sure: I would assume that this would be the case because it includes the middle point between the marginal cost and marginal benefit. Otherwise, put - the max the consumer is willing to pay and the minimum the seller is willing to take. The market being in equilibrium would suggest a compromise between these two. Just checking my answer

1. If the price of a product decreases, we would expect:

a. Demand to increase

b. Quantity supplied to decrease

c. Supply to decrease

d. Quantity supplied to increase

 

2. "Price" in the statement of the Law of Supply refers to:

a. The amount that buyers are willing and able to pay for each unit of the product.

b. Marginal cost of producing the last unit of the product.

c. The total revenues that sellers receive for selling a given quantity of the product.

d. The total amount that buyers pay to acquire a given quantity of the product.

 

3.  A decrease in demand and an increase in supply will:

a. Affect price in an indeterminate way and decrease the equilibrium quantity

b. Increase the price and affect the equilibrium quantity in an indeterminate way

c. Decrease price and affect the equilibrium quantity in an indeterminate way

d. Increase the price and increase the equilibrium quantity

 

4. When producers (say, of roads) are not able to make all consumers pay for enjoying their product (i.e., the roads), they tend to see:

a. The marginal cost of production is too low, and there is a supply-side market failure

b. The marginal benefit of production is too high, and there is a demand-side market failure

c. The marginal cost of production is too high, and there is a supply-side market failure

d. The marginal benefit of production that is too low, and there is a demand-side market failure

 

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