The Intersection of the Supply and Demand Curves Indicates

question 229

Multiple Choice

The intersection of the supply and demand curves indicates:

• A) the equilibrium solution in the market.
• B) a surplus that will cause the price to fall.
• C) a shortage that will cause the price to rise.
• D) the quantity demanded exceeds the quantity supplied.

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Definitions:

Central Planning

An economic system where the government or a central authority makes all decisions about the production and allocation of goods and services.

Economic Profits

The surplus generated when total revenues exceed the total costs (including both explicit and implicit costs) of production, reflecting a return beyond the normal profit level.

Total Costs

The combined total of expenses related to the generation of goods or services, integrating both unchanging and adjustable costs.

Market Economy

An economic system in which supply and demand from consumers direct the production of goods and services.