Chapter 6 Supply, Demand, and Price (Econ)

Equilibrium price is the price at which the quantity of a product demanded by consumers and the quantity supplied by producers

• are equal

• is higher for the product demanded

• is higher for the product supplied

• are different

When there is a shortage, producers raise prices in an attempt to

• separate the quantity supplied and demanded

• raise the quantity demanded

• equalize the quantity supplied and demanded

• lower the quantity supplied

Suppliers often reduce prices because they

• have a shortage of products to sell

• want to decrease consumer demand

• have a surplus of products to sell

• want to increase the product supply

A state of disequilibrium happens when an imbalance exists between

• quantity supplied and qeuantity demanded.

• commerce and production.

• quality supplied and quality produced.

• weights and measures.

In the price system of a market economy, prices are determined by

• central planning

• political forces

• market forces

• private investors

The price system helps to allocate resources efficiently because prices will adjust until

• an equal number of goods and services are sold

• the minimum number of goods and services are sold

• many more goods than services are sold

• the maximum number of goods and services are sold

Higher prices generally

• motivate producers to enter a market

• discourage consumers from seeking a substitute

• motivate consumers to buy

• discourage producers from entering a market

Lower prices generally

• discourage consumers from buying

• discourage producers from leaving a market

• motivate consumers to buy

• motivate producers to enter a market

Companies engage in competitive pricing to

• gain a bigger share of the market

• increase their employee salaries

• prepare for bankruptcy

• reduce their share of the market

The maximum amount that sellers may charge for a good or service is called a

• maximum wage

• minimum wage

• price ceiling

• price floor