Figure 7-1 -Refer to Figure 7-1.Which Does NOT Occur When the Price

question 105

Multiple Choice

Figure 7-1

-Refer to Figure 7-1.Which does NOT occur when the price rises from P₁ to P₂

• A)The buyers who still buy the good are worse off because they now pay more.
• B)Some buyers leave the market because they are not willing to buy the good at the higher price.
• C)The total value of what is now purchased by buyers is actually higher.
• D)Consumer surplus in the market falls.

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Definitions:

Zero Economic Profit

A condition in which a firm's total revenue equals its total costs, implying normal profit but no excess profit over what is considered normal in the industry.

Long Run

A period in economics where all factors of production and costs are variable, and firms can adjust all inputs as needed.

Marginal Revenue

The additional income that is generated by selling one more unit of a product or service.

Market Price

The current price at which a good or service can be bought or sold in a marketplace.