If the Price Is Below the Equilibrium Price

question 84

Multiple Choice

If the price is below the equilibrium price,

• A)the supply curve will shift rightward.
• B)there is a shortage.
• C)the demand curve will shift leftward.
• D)there is a surplus.
• E)the supply curve will shift leftward.

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Definitions:

Pure Competition

An ideal market scenario where products are identical, information is freely available, and there is free entry and exit of firms, ensuring no individual control over prices.

Allocative Efficiency

The optimal distribution of resources to produce the types of goods and services most desired by society.

Basis for Monopoly

The underlying conditions that enable a firm or entity to become or remain the sole supplier of a good or service, such as control over resources, government regulation, or technology.

Pure Monopoly

An economic condition where one firm controls the market for a product, effectively eliminating competition.