If in a Competitive Market the Quantity Supplied Exceeds the Quantity

question 173

Multiple Choice

If in a competitive market the quantity supplied exceeds the quantity demanded,we expect prices to:

• A)stay the same.
• B)rise.
• C)fall.
• D)rise first,then fall when demand decreases.

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Definitions:

Downstream Division

A sector of a company or industry that focuses on the final stages of production and distribution to end-users, often involving refining, selling, and distribution processes.

Transfer Price

The price at which goods and services are sold between departments or subsidiaries within the same company.

Fixed Costs

Costs that remain constant regardless of the amount of goods produced or sold, including expenses like lease payments, employee wages, and insurance fees.

Market Price

The current price at which an asset or service can be bought or sold.