If the Market Price Is Above the Equilibrium Price, There

question 400

Multiple Choice

If the market price is above the equilibrium price, there will be a tendency for price to decrease, causing

• A) the quantity demanded to decrease and the quantity supplied to increase until they are equal.
• B) the quantity demanded to increase and the quantity supplied to decrease until they are equal.
• C) both quantity demanded and quantity supplied to decrease until they are equal.
• D) both quantity demanded and quantity supplied to increase until they are equal.

---

Definitions:

Nudges

Subtle policy shifts or design changes that steer people's behavior in predictable ways without forbidding any options or significantly changing economic incentives.

Prospect Theory

A behavioral economic theory that suggests individuals value gains and losses differently, leading to decisions that can deviate from traditional economic predictions which assume rational behavior.

Behavioral Economics

A field of economics that studies how psychological, cognitive, emotional, cultural, and social factors affect the economic decisions of individuals and institutions.

High Upfront Costs

High Upfront Costs are significant initial expenses incurred before a project, investment, or purchase begins to generate any revenues or savings, often acting as a barrier to entry.