Contrary to Behavior That Would Be Required to Eliminate Output

question 89

Multiple Choice

Contrary to behavior that would be required to eliminate output gaps, many firms in the economy:

• A)intentionally set prices below equilibrium prices in order to create shortages.
• B)adjust their prices only periodically.
• C)have fully-flexible prices that change constantly.
• D)only change the amount of output they produce in the long run, not in the short run.

---

Definitions:

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price.

Market Equilibrium

The state in economics where the supply of goods matches demand, leading to stable prices.

Price Floor

A minimum price set by the government or a regulatory body, below which a good or service cannot legally be sold.

Wheat

A cereal grain that is a staple food globally, used for a variety of food products, including bread, pasta, and pastry, due to its versatility and nutritional value.