The Law of Supply and Demand Asserts That

question 129

Multiple Choice

The law of supply and demand asserts that

• A)demand curves and supply curves tend to shift to the right as time goes by.
• B)the price of a good will eventually rise in response to an excess demand for that good.
• C)when the supply curve for a good shifts,the demand curve for that good shifts in response.
• D)the equilibrium price of a good will be rising more often than it will be falling.

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Definitions:

Perfectly Elastic

A situation in which the quantity demanded or supplied responds infinitely or massively at a particular price point.

Herfindahl Index

A measure of market concentration used to determine the level of competition within an industry, calculated by summing the squares of the market shares for all firms in the market.

Differentiating Products

The strategy of making a product appear distinct from similar products in the market through branding, design, or quality improvements.

Concentration Ratio

A measure used to assess the degree to which a small number of firms dominate within an industry, often expressed as a percentage of total market share.