It Is Appropriate to Use the Supply-And Demand-Model If,in a Market

question 21

Multiple Choice

It is appropriate to use the supply-and demand-model if,in a market,

• A) everyone is a price taker with full information about the price and quality of the good.
• B) firms sell identical products.
• C) costs of trading are low.
• D) All of the above.

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Definitions:

Factors Of Production

The resources used in the production of goods and services, traditionally categorized as land, labor, and capital.

Income

The compensation gathered, often at regular intervals, from work activities or investment outcomes.

Wages, Rent, And Profit

The primary forms of income for labor, landowners, and capitalists respectively, derived from the factors of production: labor, land, and capital.

Natural Experiments

An empirical study in which the conditions of the study are determined by nature or by other factors outside the control of the investigators, but the process allows for the interpretation of causal relationships.