If a competitive market operates perfectly, it relies on
A) the number of people buying goods.
B) the laws of supply and demand.
C) how much people are willing to pay for the products.
D) how many products can be produced for sale.
B
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International data on GDP and socioeconomic variables
a. are inconclusive about the relationship between GDP and the economic well-being of citizens. b. suggest that poor nations actually might enjoy a higher standard of living than do rich nations. c. leave no doubt that a nation's GDP is closely associated with its citizens' standard of living. d. indicate that there are few real differences in living standards around the world, in spite of the large differences in GDP between nations.
Refer to the supply and demand graph below. In the graph, line S is the current supply of this product, while line S1 is the optimal supply from the society's perspective. This figure suggests that there is (are):
A. External benefits from the production of this product
B. External costs in the production of this product
C. Currently an underallocation of resources toward producing this good
D. Positive externalities from producing the good