In a market system, what must take place for quantity demanded to continually be equated with quantity supplied?
A) Price controls must be applied by governments.
B) Relative prices must be able to adjust to market clearing levels.
C) Tastes and preferences of consumers must adjust to eliminate surpluses or shortages.
D) Businesses must engage in involuntary, unprofitable exchanges to eliminate surpluses or shortages.
B
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In the figure above, the redistribution from the consumers to the producer if the firm is a single-price, unregulated monopoly rather than a perfectly competitive industry is
A) zero. B) $8.00 per day. C) $16.00 per day. D) $32.00 per day.
A firm experiences ________ when its ________ downward as output increases
A) diseconomies of scale; average total cost curve slopes B) economies of scale; long-run average cost curve slopes C) diminishing marginal returns; long-run average cost curve slopes D) diminishing marginal returns; average total cost curve shifts