When the Market Price of a Good Is Above Its

question 135

Multiple Choice

When the market price of a good is above its equilibrium value:

• A)a shortage will exist in the market.
• B)the quantity demanded will exceed the quantity supplied.
• C)both the supply curve and the demand curve will shift to the right.
• D)a surplus will exist in the market.

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Definitions:

Market Price

Today's rate at which a service or asset is being offered for buying or selling.

Price Competition

A market situation where businesses compete primarily by lowering their prices to attract customers.

Quality Competition

The competition among businesses to offer products or services of higher quality, often instead of competing on price.

Product Differentiation

Refers to the process of distinguishing a product or service from others in the market to make it more attractive to a particular target market.