Quiz on Price Determination and Market Equilibrium

What do consumers generally want regarding prices?

• Variable prices

• Stable prices

• Low prices

• High prices

What is the equilibrium price?

• The price where demand exceeds supply

• The price where supply exceeds demand

• The price where demand and supply are equal

• The price set by government regulation

What happens if a firm sets the price above the equilibrium level?

• Supply will decrease

• There will be a surplus

• There will be a shortage

• Demand will increase

In the context of market equilibrium, what does 'excess demand' refer to?

• Prices are too high

• Demand is greater than supply

• Supply is greater than demand

• Prices are too low

What occurs when the market is in a state of disequilibrium?

• Demand and supply are not equal

• Prices remain constant

• There are no shortages or surpluses

• Demand and supply are equal

What will happen to the price if there is a surplus in the market?

• The price will remain the same

• The price will fluctuate wildly

• The price will decrease

• The price will increase

What is indicated by the intersection of the demand and supply curves?

• Shortage price

• Market failure

• Surplus price

• Equilibrium price

What is the term for the amount by which supply is greater than demand?

• Market disequilibrium

• Excess supply

• Market equilibrium

• Excess demand

What will suppliers do when they recognize excess demand?

• Stop production

• Reduce supply

• Increase prices

• Lower prices