Which One of the Following Correctly Describes How Price Adjustment

question 129

Multiple Choice

Which one of the following correctly describes how price adjustment eliminates a surplus?

• A)As the price falls, the quantity demanded decreases and the quantity supplied increases.
• B)As the price falls, the demand for substitutes decreases, which eliminates the surplus.
• C)As the price rises, the quantity demanded decreases and the quantity supplied increases.
• D)As the price falls, the quantity demanded increases and the quantity supplied decreases.
• E)As the price rises, the quantity demanded increases and the quantity supplied decreases.

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Definitions:

Extinction

In behavioral psychology, the process by which a conditioned response decreases in frequency and eventually disappears when the reinforcement is withheld.

Yelling Behavior

Vocal expressions performed at a high volume, often indicative of anger, distress, or attempting to command attention.

Partial Reinforcement Effect

The greater resistance to extinction of an instrumental or operant response following intermittent rather than continuous reinforcement during acquisition.

Frustration Theory

A psychological concept suggesting that frustration, or the blocking of goal achievement, leads to aggression or other antisocial behaviors.