Excess Capacity Typically Occurs

question 24

Multiple Choice

Excess capacity typically occurs

• A)in the short run in perfect competition
• B)in the short run in monopolistic competition
• C)in long-run equilibrium in perfect competition
• D)in long-run equilibrium in monopolistic competition
• E)usually in markets experiencing an increase in demand

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Definitions:

Luxury Good

A high-end item that is not necessary for living but is deemed as highly desirable within a culture or society.

Baseball Cards

Collectible items featuring baseball players that are traded and collected by enthusiasts.

Price Inelastic

Describes a situation where the quantity demanded or supplied of a good or service changes by a smaller percentage than the percentage change in price.

Cross Elasticity

A measure of how the quantity demanded of one good responds to a change in the price of another good.