The Price of a Good Will Fall If

question 493

Multiple Choice

The price of a good will fall if

• A) there is a surplus at the current price.
• B) the current price is less than the equilibrium price.
• C) the price of a complement in consumption falls.
• D) the quantity demanded exceeds the quantity supplied.

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Definitions:

Utility Function

A mathematical representation describing how consumers rank different bundles of goods based on the level of satisfaction they provide.

Marginal Utility

The extra pleasure or benefit derived from the consumption or utilization of an additional unit of a product or service.

Marginal Utility

The additional satisfaction or usefulness obtained from acquiring or consuming one more unit of a good or service.

Risk Averse

A characteristic of individuals who prefer to avoid risk, choosing certainty over uncertainty even if it results in a potentially lower return.