-Using the Above Figure, at Which Price Is There Neither

question 301

Multiple Choice

-Using the above figure, at which price is there neither excess quantity demanded nor excess quantity supplied?

• A) P1
• B) P2
• C) P3
• D) none of these

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Definitions:

Money Wage Rate

The money wage rate refers to the nominal amount of money that employees receive in exchange for their labor, typically reported as an hourly or yearly salary.

Substitution Effect

The change in the consumption pattern of goods due to a change in relative prices, holding the level of utility constant.

Output Effect

The change in total output resulting from a change in input quantities or the introduction of new processes or technologies in the production.

Price of Capital

The cost of using capital goods, such as equipment or buildings, which is often reflected in interest rates or rental charges.