If a price in a competitive market is “too high to clear the market,” what does

Question

If a price in a competitive market is “too high to clear the market,” what does this usually mean? Assume upward-sloping supply curves.
a. No producer can cover the costs of production at that price.
b. Quantity supplied exceeds quantity demanded at that price.
c. Producers are leaving the industry.
d. Consumers are willing to buy all the units produced at that price.

Which of the following pairs are examples of substitutes?
a. Popcorn and Soda
b. Automobiles and bicycles
c. Boats and fishing tackle
d. Wine and cheese

If a price in a competitive market is “too high to clear the market,” what does this usually mean? Assume upward-sloping supply curves.
a. No producer can cover the costs of production at that price.
b. Quantity supplied exceeds quantity demanded at that price.
c. Producers are leaving the industry.
d. Consumers are willing to buy all the units produced at that price.

Which of the following statements is incorrect? Assume upward-sloping supply curves.
a. If the supply curve shifts left and the demand remain constant, equilibrium price will rise.
b. If the demand curve shifts left and the supply increase, equilibrium price will rise.
c. If the supply curve shifts right and the demand curve shifts left, equilibrium price will fall.
d. If the demand curve shifts right and the supply curve shifts left, price will rise.

Explanation / Answer

options in order d b d c

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