When We Say That a Price in a Competitive Market

question 80

Multiple Choice

When we say that a price in a competitive market is "too low to clear the market," we usually mean that:

• A)the quantity supplied exceeds the quantity demanded at that price, so there is too much competition among producers to try to get rid of that supply.
• B)consumers are not willing to buy enough at that price.
• C)producers are leaving the industry.
• D)the quantity demanded exceeds the quantity supplied at that price.
• E)no producer can cover costs of production at that price.

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Definitions:

Ounce

A unit of weight in the avoirdupois system, equal to 1/16 of a pound or approximately 28.35 grams.

Coffee

A brewed drink prepared from roasted coffee beans, the seeds of berries from certain Coffea species.

Profit

The financial gain realized when the revenue from business activities exceeds the expenses, costs, and taxes associated with sustaining the activity.

Gram

A unit of weight that is one thousandth part of a kilogram, measured in the metric system.