Edexcel A Level Business 1.2.3 Equilibrium

What happens when demand for a product increases while supply remains constant?

• Price decreases

• Price increases

• Quantity decreases

• Supply curve shifts left

Which of the following best describes equilibrium price?

• The lowest price a seller is willing to accept

• The price at which supply equals demand

• The price that maximizes supplier profit

• The price set by government regulation

If the supply of a product increases but demand remains unchanged, what is the likely outcome?

• Price will increase

• Price will decrease

• Quantity demanded will decrease

• Demand curve will shift left

What occurs when a market is in disequilibrium?

• Supply always exceeds demand

• Either a surplus or a shortage exists

• Demand equals supply

• Price remains constant

What is the main reason for a surplus in a market?

• Supply exceeds demand at the current price

• Demand exceeds supply at the current price

• Price is below equilibrium

• Government-imposed price ceiling

In a supply and demand diagram, the horizontal axis typically represents:

• Price

• Quantity

• Time

• Cost

On a supply and demand graph, a rightward shift of the demand curve indicates:

• A decrease in demand

• An increase in demand

• A decrease in price

• A decrease in supply

What would cause the supply curve to shift left?

• Increased production costs

• Technological improvements

• Reduced taxes on suppliers

• Increased number of suppliers

If the demand curve shifts left while the supply curve remains unchanged, what happens to equilibrium price and quantity?

• Price increases; quantity decreases

• Price decreases; quantity decreases

• Price increases; quantity increases

• Price decreases; quantity increases

Which of the following events would cause the demand curve for luxury cars to shift to the right?

• A decrease in consumer incomes

• A decrease in the price of luxury cars

• An increase in the price of complementary goods

• A favorable change in consumer preferences