The Equilibrium or Market Price Exists When the Supply of a Product

question 184

True/False

The equilibrium or market price exists when the supply of a product exceeds the quantity that consumers are willing to purchase.

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Definitions:

LRAC Curves

Long-Run Average Cost curves, which show the average cost per unit of output when all inputs, including capital, are variable, illustrating economies or diseconomies of scale.

Long-Run Adjustment

The process by which firms adjust their production capacity and input usage to new market conditions over time, beyond short-term fluctuations.

Returns To Scale

Rate at which output increases as inputs are increased proportionately.

Increasing Marginal Product

A situation where each additional unit of input results in an increased amount of output.