If the Price Is Above the Equilibrium Price,then

question 44

Multiple Choice

If the price is above the equilibrium price,then

• A)none of the good will be sold.
• B)the price must rise further to reach the new market equilibrium.
• C)a surplus exists.
• D)a shortage exists.
• E)price will not change;producers will cut back production until the market is in equilibrium.

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Definitions:

Expected Value

A calculation in statistics that quantifies the average outcome of a random event over a large number of occurrences.

Mean

The average value of a set of numbers, calculated by dividing the sum of all values by the number of values.

Risk Aversion

A preference for safer investments, avoiding risk even at the expense of lower potential returns.

Risky Securities

Financial instruments that carry a high level of risk, offering the potential for higher returns in exchange for greater likelihood of loss.