-Consider Exhibit 5-28

question 181

Multiple Choice

-Consider Exhibit 5-28. Between points a and b, demand would be said to be

• A) perfecly price inelastic
• B) price inelastic
• C) perfectly price elastic
• D) price elastic
• E) unitary elastic

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Definitions:

Equilibrium Price

The price at which the quantity of a good demanded equals the quantity of the good supplied.

Surplus

A situation where there is excess of supply over demand in the market, leading to downward pressure on prices.

Decrease in Demand

A situation where consumers are willing and able to purchase less of a good or service at any given price, often reflected in a leftward shift of the demand curve.

Decrease in Price

A reduction in the cost of a good or service, often resulting in increased demand or consumption.