Markets 2

What can be concluded from the demand curve for the product shown in the diagram?

• Price increases will raise the producers' revenue.

• Producers are unable to respond to a price rise.

• The product is one with many substitutes.

• There are 20 people able to buy the product.

What is meant by equilibrium in a market?

• where products offered for sale equal consumer demand

• where profit is at the expected level

• where the quantity of inputs equals the quantity of output

• where total costs equal total revenue

What can be found in a pure market economy?

• externalities and monopolies

• interest rates and public goods

• public corporations and market prices

• tax rates and commercial banks

What is meant by the equilibrium price in the market for a good?

• the average price paid by consumers

• the price at which maximum profit is made

• the price at which the producer breaks even

• the price at which the supply and demand curves intersect

What is an economist's definition of a market?

• a collection of informal retail outlets run by small firms

• a place where traders gather regularly for short periods

• a system that enables individuals and firms to buy and sell goods

• the existence of consumer demand for a good