-If the Market Price Falls from P₀ to P₁ in the Above

question 425

Multiple Choice

-If the market price falls from P₀ to P₁ in the above figure, then

• A)a new equilibrium quantity is established.
• B)there is a shortage equal to the distance EF.
• C)there will be a further tendency for price to fall.
• D)there is a surplus of goods on the market equal to the distance Q₁, Q₂.

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Definitions:

Break-Even Point

The point at which total costs and total revenues are equal, resulting in no net loss or gain.