In the Space Below Each of the Following,indicate the Effect

question 16

Essay

In the space below each of the following,indicate the effect [increase (+),decrease (-)] on equilibrium price (P)and equilibrium quantity (Q)of each of these changes in demand and/or supply.

---

Definitions:

Efficient Scale

The level of production at which a firm achieves the lowest possible cost per unit of output, optimizing its use of resources.

Demand Curve

A graph showing the relationship between the price of a good or service and the quantity demanded for a given period.

Short-Run Equilibrium

Short-run equilibrium occurs when in a market, the quantity supplied equals the quantity demanded at the current price, before any long-term adjustments are made.

MR > MC

A situation in marginal analysis where the marginal revenue (MR) exceeds the marginal cost (MC), suggesting a potential increase in profitability by expanding production.