The Market Price of Corn Is Falling

question 271

Multiple Choice

The market price of corn is falling. In a free-market economy, the most likely explanation of this price change is that:

• A) the government has decided to set a higher price so that firms competing in the market make an adequate profit.
• B) there is a surplus in the market for apples.
• C) the supply of money has decreased.
• D) the equilibrium price is lower than the market price.

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Definitions:

Bonus Plan

A compensation scheme that rewards employees beyond their regular salary, often based on performance metrics.

Net Income

The total profit of a company after all expenses and taxes have been deducted from revenue.