When Price Is Above the Equilibrium Level, Competitive Price Cutting

question 245

True/False

When price is above the equilibrium level, competitive price cutting will continue as long as quantity supplied exceeds quantity demanded.

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Definitions:

Psychological Hedonist

Someone who believes that the pursuit of pleasure is the most important motivation for human actions.

Only Pleasure

The concept that the pursuit of pleasure is the most important goal or the only source of moral value.

Avoids Pain

The natural human tendency or behavior to avoid situations or actions that may lead to physical or emotional discomfort.

Ethical Hedonism

A philosophical belief that pleasure or happiness is the highest good and proper aim of human life.