AGBE Test 4 Ch 8 & 9 Questions & Answers 2024/2025
demand curve - ANSWERSa graph illustrating how much of a given product a household would be willing to buy at different prices
Law of demand - ANSWERSthe negative relationship between price and quantity demanded: as price rises, quantity de...
demand curve - ANSWERSa graph illustrating how much of a given product a household would be willing
to buy at different prices
Law of demand - ANSWERSthe negative relationship between price and quantity demanded: as price
rises, quantity demanded decreases; as price falls. quantity demanded increases
consumer surplus (demand side) - ANSWERSthe area below the demand curve and above the market
price
supply curve - ANSWERSa graph illustrating how much of a product a firm will sell at different prices
law of supply - ANSWERSthe positive relationship between price and quantity of a good supplied: an
increase in market price will lead to an increase in quantity supplied, and a decrease in market prices will
lead to a decrease in quantity supplied
producer surplus (demand side) - ANSWERSthe area above the supply curve and below the market price
demand shifts - ANSWERScause #1 for market disequilibrium
supply shifts - ANSWERScause #2 for market disequilibrium
government policy
a) price ceilings
b) price floors - ANSWERScause #3 for market disequilibrium
market surplus - ANSWERSexist when the quantity supplied exceeds the quantity demanded
, market shortage - ANSWERSexists when the quantity demanded exceeds the quantity supplied
monopolistic competition - ANSWERSproducts are no longer identical or homogeneous
monopolistic - ANSWERSThese characteristics describe which imperfect competition?
many sellers
ability to differentiate product by advertising and sales promotion
profits can exist in the short run, but others bid them away in the long run
equate MC with MR, but read the price off the downward sloping demand curve
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