The Following Table Shows the Demand For, and Supply Of

question 149

Multiple Choice

The following table shows the demand for, and supply of, soya milk in a particular market (the quantities are in thousands of liters per day) :
$$\begin{array} { l l l } \begin{array} { c} \text { \$ Price } \\\text { per litre }\end{array} & \text { Demand } & \text { Supply } \\1.80 & 160 & 142 \\1.90 & 156 & 144 \\2.00 & 152 & 146 \\2.10 & 148 & 148 \\2.20 & 144 & 150 \\2.30 & 140 & 152 \\2.40 & 136 & 154\end{array}$$
-What is the effect on the price of an increase in demand?

• A) It will be small if the supply curve is flat.
• B) It will be big if the supply curve is flat.
• C) It will be small if the supply curve is steep.
• D) It will be big if the demand curve is flat.

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Definitions:

Economic Profits

The surplus left after a firm has deducted all its costs, including opportunity costs, from its total revenues.

Monopoly Power

The ability of a single supplier in a market to control the price and supply of a product or service, often resulting in higher prices and limited choices for consumers.

Production Costs

Expenses incurred in the process of manufacturing or producing goods and services, including labor, materials, and overhead.

Economic Profits

The surplus remaining after deducting both the explicit and implicit costs from total revenues, often showcasing the true profitability of a firm beyond accounting profits.