In an Efficient Market, a Scarce Good Generally Has a ____

question 188

Multiple Choice

In an efficient market, a scarce good generally has a ____ than a less-scarce good.

• A)higher price
• B)higher total utility to consumers
• C)more even distribution across income classes
• D)lower price in off-peak periods

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Definitions:

Competitive Market

A market structure characterized by many buyers and sellers, free entry and exit, and products that are similar, ensuring no single entity can control prices.

Profits

The financial gain achieved when the revenues generated from business activities exceed the expenses, taxes, and costs incurred in operating the business.

Fixed Costs

Costs that do not vary with the level of production or sales, such as rent, salaries, and insurance premiums.

Economic Profits

The excess of total revenue over total costs, including both explicit and implicit costs, reflecting the financial gain in terms of opportunity costs.