IGCSE Econ Ch9 Price determination

A market is defined as being in equilibrium when

• there is maximum output at minimum cost.

• demand and supply are equal

• there is no tendency for the market price to change.

• consumer satisfaction is maximised.

What is the Equilibrium Price also known as?

• Surplus Price

• Market Clearing Price

• Demand Price

• Shortage Price

What is the situation called when the quantity demanded is greater than the quantity supplied?

• Excess Supply

• Market Clearing

• Surplus

• Shortage

Where is the Equilibrium Price determined?

• At the highest price point

• At the point where market demand and market supply are equal

• At the lowest price point

• At random points

What happens if the price is set above the Equilibrium Price?

• Market Clearing occurs

• Shortage occurs

• Demand increases

• Surplus occurs

In the real-world application of Equilibrium Price Determination for movie tickets, what may theaters do to reach equilibrium during the release of highly anticipated films?

• Increase ticket prices

• Stop selling tickets

• Keep ticket prices the same

• Decrease ticket prices

In a market there is a surplus of a good. Which change would cause the market to come to an equilibrium?

• A decrease in demand

• A fall in price

• A rise in price

• An increase in supply

How is the Equilibrium Price determined using Demand and Supply curves?

• By setting the price randomly

• By only looking at the supply curve

• By finding the point where demand and supply curves intersect

• By only looking at the demand curve

What may transit authorities do during peak travel times to reach equilibrium for bus fares?

• Decrease bus fares

• Increase bus fares

• Keep bus fares the same

• Stop bus services

The market for apples is represented by the following demand and supply functions: Qd = 30 – P; Qs = 15 + 2P. What is the equilibrium quantity?

•     $10

•    $5

•   $15

•   $20