Refer to the Information Provided in Figure 3

question 168

Multiple Choice

Refer to the information provided in Figure 3.14 below to answer the question(s) that follow. Figure 3.14
-Refer to Figure 3.14. If this market is unregulated and the price is currently $90, you would expect that the price of sunglasses would

• A) remain at $90, because firms would not want to reduce the price.
• B) fall to $30, so firms could sell their excess supply.
• C) fall to $60, where quantity demanded equals quantity supplied.
• D) fall, but the new price is indeterminate from the information provided.

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Definitions:

Natural Monopolies

These are markets where a single supplier is most efficient in providing goods or services due to high fixed or startup costs associated with the market.

Competitive Industries

Sectors of the economy that have a large number of firms vying for market share, leading to better products and services for consumers.

Minimizing Losses

A strategy focused on reducing the amount of money or resources wasted or not utilized efficiently.

Output

The total amount of goods and services produced by an economy or a firm in a specific period.