If Demand Decreases and the Price Doesn't Change, There Will

question 31

Multiple Choice

If demand decreases and the price doesn't change, there will be a

• A)surplus.
• B)both a shortage and a surplus.
• C)shortage
• D)neither a shortage nor a surplus.

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Definitions:

Marginal Revenue

Enhanced revenue from the sale of an incremental unit of a product or service.

Variable Costs

Expenses that change in proportion to the activity of a business, such as costs for raw materials or production.

Profit-maximizing Output

This is the level of production at which a firm achieves the highest possible profit, determined by the point where marginal cost equals marginal revenue.

Total Cost

The complete cost of production, including both fixed and variable costs, incurred by a business in producing its goods or services.