When Profits Occur in a Competitive Market, This Indicates That

question 109

Multiple Choice

When profits occur in a competitive market, this indicates that

• A) consumers value the goods more than the resources used to produce them.
• B) producers value the goods more than the resources used to produce them.
• C) producers value the goods more than consumers value the goods.
• D) consumers value the goods less than the resources used to produce them.

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Definitions:

Equilibrium Price

Equilibrium price is the price point at which the quantity of goods supplied equals the quantity of goods demanded in the market.

Price Ceiling

A legal maximum price that can be charged for a good or service, typically set by the government to ensure affordability.

Price Floor

A government or regulatory-imposed minimum price for a good or service, intended to prevent prices from falling below a certain level.

Shortage

An instance where the need for a good or service surpasses its availability in the marketplace.