In a free-market, how are the equilibrium price and the market-clearing price related? Question 6 options: a) there is no relationship b) they are the same price c) the market-clearing price exceeds the equilibrium price d) the equilibrium price exceeds the market-clearing price
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- Refer to Figure 6-31. Suppose that a price ceiling is imposed in this market at a price of $60. The effect of this price ceiling would be a. binding and cause a shortage of 50 units. b. nonbinding and cause a shortage of 50 units. c. nonbinding and have no effect on the market. Default to equilibrium. d. binding and cause a shortage of 20 units.Consider a market with an equilibrium price of $10. If the government imposes a price ceiling of $8, other things equal, the result will be as follow: Group of answer choices A shortage will occur because the price ceiling is below the equilibrium price. A surplus will occur because the price ceiling is below the equilibrium price. The price ceiling will not affect the market which will remain at equilibrium. A surplus will occur because the price ceiling is above the equilibrium price.The equilibrium price is also called as the market-clearing price agreed price market price all of the above
- Step 1 In the free market, the equilibrium quantity and demand is determined by the forces of demand curve and supply curve. Demand is the want of consumer backed by the purchasing power. The demand is downward sloping due to negative relationship between price and quantity demanded, other things being constant. Supply is the quantity seller is willing to sell in the market at the given price level. The supply curve is upward sloping due to positive relationship between the price and quantity supplied, other things being constant. Step 2 From the given data, plot the demand and supply on graph representing quantity on the horizontal axis and the price on the vertical axis as shown in figure below: The downward sloping demand curve intersects the upward sloping supply curve at point E corresponding to which price is $5 and quantity is 12 units. b. Subsidies is the negative tax, that is, it is given by the government to the citizens in exchange of production or consumption.…In the market for automobiles, firms in the industry are able to buy the steel for the cars at a lower price. This causes Question 26 options: a) The equilibrium price to decrease and the equilibrium quantity to increase b) The equilibrium price to increase and the equilibrium quantity to decrease c) Both the equilibrium price and the equilibrium quantity to increase. d) Both the equilibrium price and the equilibrium quantity to decreaseIn a particular market, demand and supply curves are defined by the following equations QD = 300 – 20P,QS = -540 + 40P, where P is the price per unit in pounds and QD and QS are the quantity demanded and quantity supplied, respectively. A) What is the equilibrium price and quantity? B) If a maximum price is fixed at £12, what quantity will be traded?
- Which of the following statements is true? A. A price ceiling set below the equilibrium price in a particular market will cause a shortage. B. A price floor set above the equilibrium price, in a particular market, will have no effect on that market. C. A price floor set below the equilibrium price in a particular market will cause a shortage. D. A price ceiling set above the equilibrium price, in a particular market, will cause a surplus. QUESTION 6 Economic growth refers to: A. a long term increase in potential real GDP. B. an increase in nominal GDP. C. an increase in the price level. D. an economic expansion.Given the price-demand and price-supply equations below, determine the equilibrium price and find the producers' surplus at the equilibrium price level. D(x)=p=18−0.02x S(x)=p=3+0.03xQuestion 12.12. A surplus of a product will arise when price is above equilibrium with the result that quantity demanded exceeds quantity supplied. above equilibrium with the result that quantity supplied exceeds quantity demanded. below equilibrium with the result that quantity demanded exceeds quantity supplied. below equilibrium with the result that quantity supplied exceeds quantity demanded. Question 13.13. Which of the following is a consequence of rent controls established to keep housing affordable for the poor? Less rental housing is available as prospective landlords find it unprofitable to rent at restricted prices. The quality of rental housing declines as landlords lack the funds and incentive to maintain properties. Apartment buildings are torn down in favor of office buildings, shopping malls, and other buildings where rents are not controlled. All of the above are consequences of rent controls. Question 14.14. A headline…
- If a price floor is set by the government below the market equilibrium price, then Group of answer choices A: the market equilibium price will prevail. B: the quantity supplied in the market is greater than the quantity demanded, thereby creating a price ceiling. C: the quantity demanded in the market is greater than the quantity supplied, thereby creating a surplus. D: the quantity supplied in the market is greater than the quantity demanded, thereby creating a shortage.In this market, the equilibrium price is _____ per box, and the equilibrium quantity of oranges is ____ million boxes. For each of the prices listed in the following table, determine the quantity of oranges demanded, the quantity of oranges supplied, and the direction of pressure exerted on prices in the absence of any price controls. Price Quantity Demanded Quantity Supplied Pressure on Prices (Dollars per box) (Millions of boxes) (Millions of boxes) 35 15 True or False: A price ceiling above $25 per box is not a binding price ceiling in this market. True False Because it takes many years before newly planted orange trees bear fruit, the supply curve in the short run is almost vertical. In the long run, farmers can decide whether to plant oranges on their land, to plant something else, or to sell their land altogether. Therefore, the long-run supply of oranges is much more price sensitive…Which of the following is true of any market? a. The interaction of demand and supply determines the price and quantity in that market. b. There must be a supply of the item but not necessarily a demand for the item. c. Demand and supply are always equal for an item. d. There must be a demand for the item but not necessarily a supply of the item. e. The market will always be in equilibrium
