Supply and Demand Quiz

What is the law of supply and demand?

• The law of supply and demand is based on the principle of fixed prices for goods and services.

• The law of supply and demand only applies to luxury items and not essential goods.

• The law of supply and demand states that the price of a good or service is determined by the supply and demand for it in the market.

• The law of supply and demand states that the price of a good or service is determined by the government.

Name one factor that affects supply.

• Color of the product

• Price of the product

• Number of competitors in the market

• Weather conditions

Name one factor that affects demand.

• Color of the product

• Weather conditions

• Number of competitors in the market

• Price of the product

Define equilibrium price.

• Equilibrium price is the price at which there is no demand for the product.

• Equilibrium price is the price at which the quantity supplied is greater than the quantity demanded.

• Equilibrium price is the price at which the quantity demanded is greater than the quantity supplied.

• Equilibrium price is the price at which the quantity of a product supplied is equal to the quantity demanded.

Define equilibrium quantity.

• The equilibrium quantity is the quantity of a good or service that is demanded and supplied at the equilibrium price.

• The equilibrium quantity is the quantity of a good or service that is demanded and supplied at the maximum price.

• The equilibrium quantity is the quantity of a good or service that is demanded and supplied at the minimum price.

• The equilibrium quantity is the quantity of a good or service that is demanded and supplied at the market price.

What happens to price and quantity when supply increases and demand remains constant?

• Price will increase and quantity will decrease

• Price will decrease and quantity will remain constant

• Price will remain constant and quantity will decrease

• Price will decrease and quantity will increase

What happens to price and quantity when demand increases and supply remains constant?

• Price will decrease, quantity will remain constant

• Price will decrease, quantity will decrease

• Price will increase, quantity will increase

• Price will remain constant, quantity will decrease

What happens to price and quantity when both supply and demand increase?

• Quantity decreases, price decreases

• Quantity increases, price increases

• Quantity decreases, price increases

• Quantity increases, price may increase or decrease

What happens to price and quantity when both supply and demand decrease?

• Price increases, quantity increases

• Price decreases, quantity increases

• Price increases, quantity decreases

• Price decreases, quantity is ambiguous

What is the relationship between price and quantity in the law of supply and demand?

• There is no relationship between price and quantity in the law of supply and demand.

• The relationship between price and quantity in the law of supply and demand is that as price increases, quantity supplied increases, and as price decreases, quantity supplied decreases.

• The relationship between price and quantity in the law of supply and demand is that as price increases, quantity supplied remains constant.

• The relationship between price and quantity in the law of supply and demand is that as price increases, quantity supplied decreases, and as price decreases, quantity supplied increases.