It Can Be Inferred That When Firms and Consumers Respond

question 42

Multiple Choice

It can be inferred that when firms and consumers respond to changing price signals in a competitive market with well-defined and transferable property rights:

• A) they will achieve the efficient solution in the marketplace.
• B) they will rarely achieve the efficient solution given flexible prices.
• C) they will, in the real world, seldom act according to marginal benefit and marginal cost analysis.
• D) there will generally be a shortage of apples, because they are scarce.

---

Definitions:

Larger Amounts

Quantities that exceed the standard or expected volume or number in a given context.

Auctions Frequency

The rate or regularity at which auctions are held over a certain period of time.

First-Price Auction

A type of auction in which the highest bidder wins and pays the amount of their bid.

True Values

Genuine or inherent values that are not influenced by external factors.