The Relationship Between Quantity Supplied and the Price of Output

question 245

Multiple Choice

The relationship between quantity supplied and the price of output is such that

• A) an increase in quantity will automatically lead to a reduction in price.
• B) an increase in price will lead to an increase in quantity supplied.
• C) an increase in price will produce an inward shift in the supply curve.
• D) quantity will decrease as the number of firms increases.

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Definitions:

Budget Line

A graphic representation of all possible combinations of two goods that a consumer can afford with their income at given prices.

Consumer's Money Income

The total amount of monetary income received by a consumer, influencing their purchasing power and consumption choices.

Prices

The amount of money required to purchase a good, service, or asset.

Goods

Goods are tangible items that satisfy human wants or needs, which can be transferred from one person to another and include consumer products, commodities, and durable goods.