When There Is a Surplus, Sellers Have an Incentive to ______

question 245

Multiple Choice

When there is a surplus, sellers have an incentive to ______ their price and buyers have an incentive to offer a ______ price.

• A) increase; lower
• B) decrease; lower
• C) increase; higher
• D) decrease; higher

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Definitions:

Technological Advance

The development and application of innovative processes, equipment, or software that enhances productivity, efficiency, or quality.

Farmers

Individuals or entities engaged in the activity of agriculture, which includes the cultivation of plants and rearing of animals for food, fiber, biofuel, medicines, and other products used to sustain and enhance human life.

Optimal Allocation

The most efficient distribution of resources within an economy to maximize the output or welfare.

MB = MC

A principle in economics indicating the optimal level of output or consumption, where the marginal benefit (MB) equals the marginal cost (MC).