Understanding Supply and Demand Basics

Front

What happens to the quantity demanded of a good when its price decreases, assuming all other factors remain constant?

Back

It increases.

Front

What best describes a perfectly competitive market?

Back

A market with many buyers and sellers, where no single entity can influence the price.

Front

What is meant by "equilibrium price" in the context of supply and demand?

Back

The price at which the quantity supplied equals the quantity demanded.

Front

If the demand for a product is elastic, what happens to total revenue when the price decreases?

Back

Total revenue increases.

Front

What shifts the supply curve to the right?

Back

A technological advancement in production.

Front

In a monopolistic competition, what is a key feature that differentiates it from perfect competition?

Back

Differentiated products.

Front

Effect on equilibrium quantity when both supply and demand curves shift to the right?

Back

Equilibrium quantity increases.

Front

Which of the following is an example of a barrier to entry in a market?

• High consumer demand.
• Economies of scale.
• Low production costs.
• A large number of competitors.

Back

Economies of scale.