Market Concepts Quiz

What is meant by a market?

• A place where goods are produced

• A system where goods and services are exchanged

• A location for storing goods

• A method of advertising products

Why are there demand and supply sides in a market?

• To create competition

• To balance production and consumption

• To increase prices

• To reduce the number of sellers

What is a demand curve?

• A graph showing the supply of a product

• A chart of consumer preferences

• A graph showing the relationship between price and quantity demanded

• A list of product prices

What is a supply curve?

• A graph showing the relationship between price and quantity supplied

• A chart of consumer preferences

• A list of product prices

• A graph showing the demand for a product

What factors determine demand for a product?

• Production costs

• Consumer preferences and income

• Number of suppliers

• Government regulations

What factors determine the supply of a product?

• Consumer preferences

• Production costs and technology

• Income levels

• Advertising strategies

How do you calculate price elasticity of demand?

• By dividing the change in quantity demanded by the change in price

• By multiplying the change in price by the change in quantity demanded

• By adding the change in price to the change in quantity demanded

• By subtracting the change in price from the change in quantity demanded

What is the difference between elastic and inelastic demand?

• Elastic demand is unresponsive to price changes, inelastic is responsive

• Elastic demand is responsive to price changes, inelastic is unresponsive

• Both are equally responsive to price changes

• Elastic demand is only applicable to luxury goods

How do elasticities affect revenue for a business?

• Elasticities have no effect on revenue

• Elastic demand can increase revenue with price decreases

• Inelastic demand always decreases revenue

• Elastic demand decreases revenue with price increases

What is meant by equilibrium in a market?

• When supply exceeds demand

• When demand exceeds supply

• When supply equals demand

• When prices are constantly changing