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The Gerad Company Has Decided to Build Their New Factory

question 63

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The Gerad Company has decided to build their new factory in an area of the city that is considered a problem area. When they applied for a loan at the bank, they were refused. The refusal of this loan is an example of ________.


Definitions:

New Equilibrium

The point at which market supply and demand balance each other, and, as a result, prices become stable following a disturbance.

Producer Surplus

The difference between what producers are willing to accept for a good versus what they actually receive, measured above the supply curve.

Equilibrium Price

The price at which the quantity of a good or service demanded equals the quantity supplied, reaching a state of balance where there are no surplus or shortage.

Producer Surplus

The difference between what producers are willing to accept for a good or service versus what they actually receive, reflecting gains from trade.

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