A Decrease in the Demand for Beef Because of Concerns

question 401

Multiple Choice

A decrease in the demand for beef because of concerns over cholesterol results in

• A) lower beef prices.
• B) higher beef prices.
• C) an increase in the supply of beef.
• D) an offsetting increase in the demand for beef if the price of beef falls.

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Definitions:

Shut-down Point

The price and quantity point at which a business ceases operations because continuing would result in losses.

Economically Efficient

A situation where resources are allocated in a way that maximizes the net benefit to society or minimizes the cost of achieving a set output level.

Deadweight Loss

A loss of economic efficiency that can occur when equilibrium for a good or a service is not achieved or is not achievable.

Social Cost

The total cost to society of an activity or decision, including both direct costs borne by the individual and indirect costs absorbed by the broader community.