Table 7-17 -Refer to Table 7-17. Both the Demand Curve and the Demand

question 457

Multiple Choice

Table 7-17

-Refer to Table 7-17. Both the demand curve and the supply curve are straight lines. If 6 units are bought and sold, then total surplus is

• A) $18 lower than it would be if the equilibrium number of units were bought and sold.
• B) $22 lower than it would be if the equilibrium number of units were bought and sold.
• C) $26 lower than it would be if the equilibrium number of units were bought and sold.
• D) $6 higher than it would be if the equilibrium number of units were bought and sold.

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Definitions:

Entry Barriers

Obstacles that prevent new competitors from easily entering an industry or market, such as high startup costs or stringent regulations.

Price Searcher

A firm or individual with the ability to control the price of the goods or services provided because of a lack of competition or the unique nature of the product.

Downward-sloping Demand

This concept describes the typical relationship in economics where, as the price of a good or service decreases, the quantity demanded increases, and vice versa.

Competitive Environment

A market setting where multiple firms are in rivalry to offer goods or services, driving innovation, efficiency, and choice.