A Firm in a Market Economy Must Do All of the Following

question 172

Multiple Choice

A firm in a market economy must do all of the following to succeed except

• A)produce the goods and services that consumers want at a lower cost than consumers themselves can produce.
• B)organize the factors of production into a functioning, efficient unit.
• C)have access to sufficient funds.
• D)be organized as a corporation.

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Definitions:

Supply Price

The lowest price at which a seller is willing to sell a good or service, influenced by costs of production and market demand.

Quota Rent

The earnings exceeding normal profits received by license holders when import quotas are in place.

Demand Price

The price of a good or service dictated by the desire and ability of consumers to purchase it at certain price levels.

Import Quota

A government-imposed limit on the quantity or monetary value of certain goods that can be imported into the country over a specified period of time.