In a Competitive Market What Happens to the Price When

question 167

Multiple Choice

In a competitive market what happens to the price when the supply curve shifts right?  

• A) It increases. 
• B) It decreases. 
• C) It stays the same. 
• D) It may increase or decrease.

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Definitions:

Profits

The financial gain obtained when the revenue generated from business activities exceeds the expenses, costs, and taxes needed to sustain the activity.

Deregulation

The removal or reduction of government restrictions and regulations in an industry to encourage increased competition.

Reduced Prices

The offering of goods and services at lower rates than originally marked, often to clear inventory or boost sales.

Competition

The economic rivalry among businesses to attract customers, increase sales, and achieve a higher market share.