Economics Quiz: Determination of Price and Quantity

What is the price of a commodity?

• The total revenue of the seller

• The cost of production of the commodity

• The amount of money given by a buyer to a seller in exchange of a unit of a goods or service

• The total cost of the seller

What is meant by equilibrium price?

• The price at which quantity demanded of a commodity is equal to its quantity supplied

• The price at which quantity demanded of a commodity is less than its quantity supplied

• The price at which quantity demanded of a commodity is greater than its quantity supplied

• The price at which quantity demanded of a commodity is not related to its quantity supplied

What happens to the equilibrium price of a commodity when its demand increases and supply remains the same?

• Equilibrium price will fluctuate

• Equilibrium price will decrease

• Equilibrium price will increase

• Equilibrium price will remain the same

How is equilibrium quantity affected when the demand for a commodity increases but supply remains the same?

• It will remain the same

• It will fluctuate

• It will increase

• It will decrease

What is the meaning of equilibrium quantity?

• The quantity at which the market is in balance

• The quantity of a commodity supplied by the sellers

• The quantity of a commodity demanded by the buyers

• The quantity at which the price is highest

What is the effect of a decrease in supply of a commodity on its equilibrium price when its demand remains the same?

• Equilibrium price will increase

• Equilibrium price will fluctuate

• Equilibrium price will decrease

• Equilibrium price will remain the same

If at a given price of a commodity, quantity demanded is greater than its quantity supplied, what will happen to the price?

• Price will fluctuate

• Price will remain the same

• Price will start falling

• Price will start rising

What is the situation called when quantity supplied of a commodity is greater than its quantity demanded?

• Excess demand

• Market saturation

• Market equilibrium

• Excess supply

What happens to the price of a commodity when there is excess supply in the market?

• Price starts rising

• Price remains the same

• Price starts falling

• Price fluctuates

What is the main aim of the seller when fixing the price of a commodity?

• To match the price of other sellers

• To earn maximum profit

• To decrease the quantity supplied

• To increase the quantity demanded