Explain how price adjusts to eliminate excess demand
What will be an ideal response?
When there is excess demand, quantity demanded is greater than quantity supplied. Therefore, the price will rise. As the price rises, quantity demanded falls and quantity supplied rises. Price will continue to rise until quantity demanded and quantity supplied are equal (at the market equilibrium).
Economics
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If the first four units of a good consumed have marginal utilities of 8, 4, 2, and 1, respectively, this trend is an indication of the:
a. law of consumer equilibrium. b. law of diminishing marginal utility. c. law of diminishing consumer surplus. d. law of supply.
Economics
DeBeers' diamond monopoly results from
A. a government franchise. B. ownership of a scarce factor of production. C. economies of scale. D. a patent.
Economics