When the Price Is $2

question 136

Multiple Choice

When the price is $2

• A)quantity supplied is greater than quantity demanded and,therefore,price must rise to get to equilibrium.
• B)quantity supplied is less than quantity demanded and,therefore,price must fall to get to equilibrium.
• C)quantity demanded is greater than quantity supplied and,therefore,price must rise to get to equilibrium.
• D)quantity demanded is greater than quantity supplied and,therefore,price must fall to get to equilibrium.

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Definitions:

Scarce Resources

Natural or economic resources that are limited in supply compared to the demand for them.

Long-run Equilibrium

Long-run equilibrium occurs when all firms in a market or industry are producing at their most efficient level, with no incentive to enter or exit the market.

Purely Competitive

A market structure characterized by many buyers and sellers, where each has negligible impact on market price.

Minimum ATC

The lowest point on the Average Total Cost curve, indicating the most cost-efficient level of production.