Pricing Basics 3.2.1/3.2.2 PBMF

When there is a limited amount of a product, such as rare art or collectible cars, this is known as _____.

• supply

• scarcity

• demand

• elasticity

If the market price moves from one point on a demand curve to another point on the curve, what has happened to total market demand?

• The total market demand has been adjusted by a change in supply.

• The total market demand has increased.

• The total market demand has decreased.

• The total market demand has not changed.

If the supply of a pair of jeans is less than what would meet customer demand, what would likely happen to the average market price of the jeans?

• The average market price is lower than the equilibrium point.

• The average market price is exactly the same as the equilibrium price.

• The average market price is higher than the equilibrium point.

• The spot price and the average market price are the same.

The demand in the market for smartphones has increased, causing prices to rise. What effect will this likely have on the supply of smartphones?

• Supply will decrease, as always happens when price increases.

• The supply curve will shift up according to the increased demand.

• The supply point will increase by moving along the existing supply curve; the curve itself will not shift.

• The supply point will increase by moving along the existing supply curve, and the entire curve will shift upwards as well.

A buyer and seller agree upon the price of an item. What type of price is this known as?

• Bid price

• Bid price

• Spot price

• Market price

What is the point called where the supply curve and the demand curve meet?

• Maximum profit point

• Market point

• Optimum price point

• Equilibrium point

A salesperson sets a starting price for a new car that the buyer thinks is slightly too high. What type of price might the buyer counter with?

• A bid price

• An offer price

• A lowball price

• A firm price

What will happen to the demand curve if government regulations require that all households have at least two carbon monoxide alarms instead of just one?

• The equilibrium point will move along the demand curve to the right.

• The entire demand curve will shift upwards.

• The equilibrium point will move along the demand curve to the left.

• The demand curve will be unchanged.

If a new source of lumber is found, what is likely to happen to the price of lumber, and why?

• The price is likely to increase because demand will increase.

• The price is likely to decrease because demand will decrease.

• The price is likely to increase because costs of production will increase.

• The price is likely to decrease because supply has increased.

If the average market price for an item is higher than the equilibrium price, which of the following is likely to take place?

• Consumers will buy all of the product supply and not be satisfied.

• More product will be produced than consumers want to purchase.

• The price will increase drastically.

• Supply and demand will be equal.