Five Hundred Units of Good X Are Currently Bought and Sold.The

question 12

Multiple Choice

Five hundred units of good x are currently bought and sold.The marginal buyer is willing to pay $40 for the 500^th unit,and the cost to the marginal seller is $35 for the 500^th unit.We know that

• A)the equilibrium price of good x is somewhere between $35 and $40.
• B)the equilibrium quantity of good x exceeds 500 units.
• C)500 units is not an efficient quantity of good x.
• D)All of the above are correct.

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Definitions:

AVC

Average Variable Cost, which is the total variable costs (costs that change with the level of output) divided by the quantity of output produced.

Shut Down

The temporary or permanent cessation of operations, often referring to business closure due to economic events or strategic decisions.

Purely Competitive Seller

Describes a market situation where a large number of sellers offer identical products, and no single seller can influence the market price.

Product Price

The amount of money charged for a product or service, or the sum of the values that consumers exchange for the benefits of having or using the product or service.