When a Market Is in Equilibrium but Too High for Some

question 137

Multiple Choice

When a market is in equilibrium but too high for some consumers:

• A)the government will intervene to set the correct prices
• B)the price determines which buyers and sellers participate in the market, and those unable to afford the good will opt out
• C)those buyers who value the good less than the price choose to buy the good
• D)those sellers whose costs are more than the price choose to produce and sell the good

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Definitions:

Compete On Quality

a business strategy where companies focus on offering higher quality products or services instead of competing on prices.

Product Differentiation

The strategy of distinguishing a product from others in the market by emphasizing its unique features, benefits, and attributes.

Size Distribution

Refers to the variation in size among entities in a population, such as companies within an industry or incomes among individuals.

Market Power

The ability of a company or entity to influence the price or terms of products in the market to its advantage, often because of its size or market share.