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When a Market Is in Equilibrium, Consumers Who Are Not

question 16

True/False

When a market is in equilibrium, consumers who are not willing to pay the market-clearing price have not made a smart choice.


Definitions:

Profit-maximizing Level

The point at which a business achieves the highest profit, where marginal cost equals marginal revenue.

Market Demand

The sum of all the quantities of a good or service demanded per period by all the households buying in the market for that good or service.

Total Revenue

The total income a firm receives from selling its goods or services, calculated as the price per unit times the number of units sold.

Total Cost

Total Cost is the sum of all expenses incurred in the production of goods or services, including both fixed and variable costs.

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