Assume a Competitive Market Is in Equilibrium

question 50

Multiple Choice

Assume a competitive market is in equilibrium.There is an increase in demand, but no change in supply.As a result the equilibrium price ________, and the equilibrium quantity is ________.

• A) rises; increases
• B) rises; does not change
• C) falls; does not change
• D) falls; decreases
• E) falls; increases

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Definitions:

Productivity

The measure of efficiency depicted as the ratio of total output produced to a total input used, often used to gauge the efficiency of production or economic performance.

Occupational License

A form of certification or permit indicating that an individual is qualified to carry out a specific job or profession.

Labor Market

The supply and demand for labor, where employers seek to hire workers and workers look for jobs.

Purely Competitive Market

A purely competitive market is an economic theory describing a market where many sellers offer identical products, leading to prices being determined by supply and demand.