Suppose That Market Demand for a Good Slopes Downward and Market

question 30

Multiple Choice

Suppose that market demand for a good slopes downward and market supply slopes upward. Equilibrium price is now $10 and 500,000 units of the good are traded at this price. Suppose now that the cost at which each unit of the good is produced falls. What is the likely effect of this change on the market equilibrium?

• A)Excess supply
• B)A fall in price
• C)A shift in demand to the right
• D)An increase in price

Comprehend the principles behind effective financial incentive plans and their impact on employee motivation.

Understand the influence of managerial theories (Theory X, Theory Y, Theory Z) on leadership styles and organizational practices.

Grasp the strategies for motivating employees beyond financial incentives, focusing on intrinsic rewards and job design.

Recognize the benefits and challenges associated with performance-related pay systems.

---

Definitions:

Mailbox Rule

A rule providing that an acceptance of an offer takes effect at the time it is communicated via the mode expressly or impliedly authorized by the offeror, rather than at the time it is actually received by the offeror. If acceptance is to be by mail, for example, it becomes effective the moment it is placed in the mailbox.

Offer

A proposal presented by one party to another as a basis for negotiations in a potential contract.

Accepted

Regarded as satisfactory or agreed upon; an acknowledgement of an offer or situation.

Promissory Estoppel

A legal principle preventing a party from withdrawing a promise made to another party if the latter has relied on that promise to their detriment.