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In the Figure Given Below D1 and S1 Are the Initial

question 73

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In the figure given below D1 and S1 are the initial demand and supply curves for a commodity in the market.
Figure 3.3
In the figure given below D<sub>1</sub> and S<sub>1</sub> are the initial demand and supply curves for a commodity in the market. Figure 3.3    -Refer to Figure 3.3. If the change in the demand in this market occurred before the change in supply, then starting from the initial equilibrium: A)  firms would experience a fall in profits and then a gradual increase in profits after the change in supply occurred. B)  there would be an immediate shortage, lasting until the price reaches P<sub>2</sub>. C)  price would change from P<sub>1</sub> to P<sub>2</sub> after the change in demand and would change again from P<sub>3 </sub>to P<sub>4</sub> after the change in supply. D)  there would be a surplus until the price reaches P<sub>4</sub>. E)  there would be a surplus even after price reaches P<sub>4</sub>.
-Refer to Figure 3.3. If the change in the demand in this market occurred before the change in supply, then starting from the initial equilibrium:


Definitions:

Bounded Rationality

A concept suggesting that the cognitive limitations of the mind, and the finite amount of time available, limit human decision-making capabilities.

Limited Information

A situation where decision-makers do not have access to all the data or facts needed to make an informed decision.

Satisficing

A decision-making strategy that aims for a satisfactory or adequate result, rather than the optimal solution, due to constraints like time or information.

Decision-Making Process

The steps or stages involved in choosing a course of action from several alternatives, typically involving problem identification, analysis, and the selection of the best solution.

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