Suppose That Quantity Supplied of a Product Equals 8 Units

question 214

Multiple Choice

Suppose that quantity supplied of a product equals 8 units and quantity demanded equals 5 units at the current price. This market is

• A) experiencing a shortage of this product.
• B) experiencing a surplus of this product.
• C) experiencing a decrease in supply.
• D) in equilibrium with neither a surplus nor a shortage.

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Definitions:

Per-Worker Production Function

A mathematical representation of the output produced per worker, based on factors like technology and capital.

Diminishing Slope

usually refers to the principle of diminishing returns in economics, where the rate of return or yield decreases as more input is added.

Per-Worker Production Function

A graph that shows the relationship between the amount of input per worker and the output per worker.

Capital Deepening

The increase in the amount of capital per worker, leading to higher productivity and possibly higher wages.