The Market-Clearing Price

question 313

Multiple Choice

The market-clearing price

• A) refers to a demand curve.
• B) refers to a surplus.
• C) is the price at which quantity demanded equals quantity supplied.
• D) refers to a shortage.

---

Definitions:

Fixed Costs

Expenses that do not change with the level of production or sales over a short period, such as rent, salaries, and insurance.

Break-even Sales

The amount of revenue that must be generated to cover total fixed and variable costs, resulting in zero net income or loss.

Unit Selling Price

The price at which a single unit of a product is sold, determining the revenue generated from sales.

Variable Costs

Costs that vary directly with the level of production or business activity, such as materials and labor.