-Refer to the Table 4-1

question 60

Multiple Choice

-Refer to the Table 4-1. If the price were $120, what would happen?

• A) A surplus of 50 units would exist and the price would tend to fall.
• B) A surplus of 10 units would exist and the price would tend to fall.
• C) A surplus of 25 units would exist and the price would tend to fall.
• D) A shortage of 25 units would exist and the price would tend to rise.

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Definitions:

Profit-Maximizing

The approach a company takes to determine the most profitable pricing and output combination.

Deadweight Loss

An inefficiency in the market that occurs when supply and demand are out of balance, resulting in lost economic opportunity.

Consumer Surplus

The distinction in the collective amount consumers are disposed and financially able to spend on a product or service, and the collective amount they actually spend.

Profit-Maximizes

A strategy or behavior exhibited by firms aiming to achieve the highest possible profits by adjusting their production levels, prices, and cost structures.