Principles of Economics (MindTap Course List)
8th Edition
ISBN: 9781305585126
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Question
Chapter 7, Problem 6CQQ
To determine
The impact of producing higher than the equilibrium.
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Choose all statements that are true.
A.
The supply curve represents the behavior of sellers and the supply curve is a function that shows the quantity supplied at different prices.
B.
An increase in supply means that sellers are willing to sell more quantity at all prices.
C.
An increase in supply is seen as a SHIFT of the supply to the RIGHT.
D.
Producer surplus is the area above the supply curve and below the price.
E.
A supply curve can be read horizontally or vertically. The horizontal reading tells us how much suppliers are willing and able to sell at each price. The vertical reading tells us the minimum price at which suppliers will sell a given quantity.
F.
An increase in supply means that sellers are willing to accept a lower price for each quantity
If the price in a competitive market is "lower than equilibrium" then
a. quantity demanded exceeds quantity supplied at that price.
b. no producer can cover his costs of production at that price.
c. quantity supplied exceeds quantity demanded at that price.
d. producers in this industry are making a profit
e. not all producers that are willing to sell at the market price are able to.
Who gets the benefit when there is surplus
of goods in the market
household
consumers
government
sellers
Chapter 7 Solutions
Principles of Economics (MindTap Course List)
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- If the price of a product is below the equilibrium price, the result will be A. A shortage of the good. B. A surplus of the good. C. A decrease in the supply of the good. D. An increase in the demand of the good.arrow_forwardAn increase in consumer income will cause a decrease in the demand for an inferior good. A.True B.Falsearrow_forwardGive typing answer with explanation and conclusion Explain carefully why, in a competitive market, a quantity less than the equilibrium quantity is inefficient.arrow_forward
- A competitive market will: A. achieve an equilibrium price. B. produce shortages. C. produce surpluses. D. create disorder.arrow_forwardsurplus is the difference between the maximum price a consumer is (or consumers are) willing to pay for a product and the actual [market] price. A. Producer B. Consumer C. Nonearrow_forwardWhich of the following is true of any market? a. The interaction of demand and supply determines the price and quantity in that market. b. There must be a supply of the item but not necessarily a demand for the item. c. Demand and supply are always equal for an item. d. There must be a demand for the item but not necessarily a supply of the item. e. The market will always be in equilibriumarrow_forward
- Researchers find that drinking beer has positive health effects. What impact will this have on the price of beer and producer surplus? Select one: a. they both decrease b. the equilibrium market price increases, and producer surplus decreases c. they both increase d. the equilibrium market price decreases, and producer surplus increasesarrow_forwardChewing gum is considered an inferior good. What would happen to the equilibrium price and quantity of chewing gum if income increased and more firms started producing chewing gum? Equilibrium price will A. go up and equilibrium quantity will go up. B. be indeterminate and equilibrium quantity will go up. C. go up and equilibrium quantity will go down. D. go down and equilibrium quantity will be indeterminate.arrow_forwardWhen consumers face rising gasoline prices, they typically A. reduce their quantity demanded more in the short run than in the long run.B. reduce their quantity demanded more in the long run than in the short run.C. do not reduce their quantity demanded in the short run or the long run.D. increase their quantity demanded in the short run but reduce their quantity demanded in the long run.E. None of the above .arrow_forward
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