Which of the Following Is a Key Assumption of the Supply

question 32

Multiple Choice

Which of the following is a key assumption of the supply and demand model?

• A) the price and quantity sold are determined in a single market
• B) the prices and quantities sold are simultaneously determined in all markets
• C) the way the whole economy achieves equilibrium
• D) international markets affect domestic markets, which in turn affect local markets

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Definitions:

Added Profit

Additional earnings generated from an action or operation beyond the original or expected profit.

Modern View of Technological Advance

This refers to the contemporary understanding that technological progress is a key driver of economic growth, influencing productivity, business models, and societal changes.

Profit Incentives

Motivations for businesses and individuals to increase their earnings and achieve financial gains, often driving economic activities and innovation.

Market System

(1) An economic system in which individuals own most economic resources and in which markets and prices serve as the dominant coordinating mechanism used to allocate those resources; capitalism. Compare with command system. (2) All the product and resource markets of a market economy and the relationships among them.