Ceteris Paribus,an Increase in the Number of Sellers of Running

question 21

Multiple Choice

Ceteris paribus,an increase in the number of sellers of running shoes causes equilibrium price to

• A)Decrease and equilibrium quantity to increase.
• B)Decrease and equilibrium quantity to decrease.
• C)Increase and equilibrium quantity to increase.
• D)Increase and equilibrium quantity to decrease.

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Definitions:

Efficiency

The optimal allocation of resources in a way that maximizes productivity or utility.

Price Discrimination

Price discrimination involves a seller charging different prices for the same product or service to different customers, based on factors like demand, customer attributes, or purchase volume.

Monopolistic Competition

Monopolistic competition describes a market structure where many firms sell products that are similar but not identical, allowing for some degree of market power and price setting.

Perfect Competition

A market structure characterized by many buyers and sellers, identical products, and free entry and exit, leading to efficient outcomes.