At the Point Where the Demand and Supply Curves for a Product

question 277

Multiple Choice

At the point where the demand and supply curves for a product intersect,

• A) the selling price and the buying price need not be equal.
• B) the market may, or may not, be in equilibrium.
• C) either a shortage or a surplus of the product might exist, depending on the degree of competition.
• D) the quantity that consumers want to purchase and the amount producers choose to sell are the same.

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Definitions:

Long-Run Average Total Cost Curve

A curve that shows the lowest possible cost of producing different levels of output when all factors of production, including capital, can be varied.

Unit Costs

The investment required by a company to develop, keep, and trade one instance of a specific product or service.

Plant Size

Plant size refers to the capacity or physical extent of a manufacturing or production facility, which impacts its output and efficiency levels.

Minimum Efficient Scale

The smallest level of production at which a firm can achieve the lowest long-run average total cost, underscoring economies of scale.