Assume a Market That Has an Equilibrium Price of $8

question 50

Multiple Choice

Assume a market that has an equilibrium price of $8.If the market price is set at $7,consumer surplus:

• A) rises for some because of the decreased price.
• B) decreases for some because of fewer transactions taking place.
• C) Both of these statements are true.
• D) Neither of these statements is true.

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Definitions:

Economies of Scale

The cost advantage that arises with increased output of a product, where the per-unit cost decreases as production expands.

Economy of Scope

Cost advantages that businesses experience by producing a variety of products rather than specializing in a single output.

Range of Products

The variety of different items that a company offers for sale to its customers.

Collective Agreements

Contracts made between employers and a group of employees, often represented by a union, that determine the terms of employment, including wages, working hours, and working conditions.