Use the Figure Below to Answer the Following Questions

question 77

Multiple Choice

Use the figure below to answer the following questions.

Figure 3.4.2
-Refer to Figure 3.4.2. When the price is $10 a unit,

• A)consumers will buy only 100 units of output.
• B)consumers will buy 500 units of output.
• C)consumers will buy nothing.
• D)a shortage occurs.
• E)the surplus is zero.

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Definitions:

Substitutes

Goods or services that can be used in place of one another. When the price of one rises, the demand for its substitute is likely to increase.

Elastic

Describes a situation in which the supply or demand for a good or service is highly responsive to changes in price.

Long Run

A period in economic analysis where all factors of production and costs are variable, allowing for full adjustment to changes in the market or economy.

Short Run

A period in economic theory during which at least one factor of production is fixed, limiting the capacity to adjust to changes in market demand.