Unless Circumstances Are Quite Out of the Ordinary, a Demand

question 117

Multiple Choice

Unless circumstances are quite out of the ordinary, a demand curve will be

• A)vertical
• B)horizontal
• C)downward sloping
• D)upward sloping

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Definitions:

Market Price

The current price at which an asset or service can be bought or sold in a given market.

Shut Down

A short-term decision by a firm to cease production due to market conditions, not covering variable costs in the short run.

Average Variable Cost

The total variable costs divided by the quantity of output produced.

Perfectly Competitive

A market structure characterized by many buyers and sellers, identical products, and free entry and exit, leading to price determination by supply and demand.