As the Equilibrium Price Falls in a Perfectly Competitive Market,so

question 36

Multiple Choice

As the equilibrium price falls in a perfectly competitive market,so do firms':

• A)revenue and so do their profits.
• B)total costs and so do their profits.
• C)revenue,and their profits rise.
• D)total costs,and their profits rise.

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Definitions:

Upward-Sloping Demand

A representation typically contrary to the law of demand, suggesting that as prices increase, the quantity demanded also increases. Generally, this is indicative of Giffen or Veblen goods.

Equilibrium Price

The price at which the quantity of a good or service demanded by consumers is equal to the quantity supplied by producers, leading to market balance.

Velcro

A fastening device consisting of two strips of fabric, one covered with tiny hooks and the other with a dense pile, which adhere when pressed together.

Upward-Sloping Supply

A graphical representation indicating that as the price of a good increases, the quantity supplied also increases, assuming other factors remain constant.