In the Long Run, in a Price-Taker Market, the Price

question 126

Multiple Choice

In the long run, in a price-taker market, the price of a good is determined primarily by the

• A) average total cost of producing it.
• B) decision of buyers in determining how much they are willing to pay for the good.
• C) elasticity of supply.
• D) number of firms in the industry.

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Definitions:

Equilibrium Price

The value at which the supply and demand for a good or service are equal, creating a balanced market scenario.

Equilibrium Quantity

The quantity of goods or services traded in a market at the equilibrium price, where supply equals demand.

Demand for Bottled Water

Refers to the consumer need or desire to purchase bottled water, influenced by factors like health concerns, convenience, and taste preferences.

Substitute Product

A product that can be used in place of another, fulfilling the same needs or desires.