Exam 3: Demand, Supply, and Market Equilibrium

In a competitive market, every consumer willing to pay the market price can buy a product and every producer willing to sell the product at that price can sell it.

Assume in a competitive market that price is initially below the equilibrium level. We can predict that price will

In the market for sushi, an increase in supply and a greater decrease in demand will cause both the equilibrium price and quantity to decrease.

The development of a new production technique that lowers the cost of producing 3-D movies will shift the supply curve of 3-D movies to the right.

Rather than subsidizing federal student loans for students, how might the U.S. government use the supply of higher education to reduce the cost of attending college?

Toothpaste and toothbrushes are substitute goods.

Assume in a competitive market that price is initially above the equilibrium level. We can predict that price will

The relationship between quantity supplied and price is _____, and the relationship between quantity demanded and price is _____.

A price ceiling imposed by the government is intended to benefit the sellers of the product.

If market demand increases and market supply decreases, the change in equilibrium price is unpredictable without first knowing the exact magnitudes of the demand and supply changes.

Increasing marginal cost of production explains

A price floor means that

When a fruit or vegetable (such as strawberries or lentils)is in season, the demand for it will increase as it becomes cheaper.

Suppose that salsa manufacturers sell 2 million bottles at $3.50 in one year and 3 million bottles at $3 in the next year. Based on this information, we can conclude that the

Compare changes in the equilibrium price and quantity when demand increases in a market with an upward sloping supply curve and in a market with a vertical supply curve.

List five determinants of market demand that could cause demand to increase.

If the demand for electronic readers and tablets increases, then their supply will increase as price rises.

The law of supply states that, ceteris paribus, if the price of loans (known as the "interest rate")rises then the quantity supplied of loans will increase.

(Advanced analysis)The demand for commodity X is represented by the equation P = 10 - 0.2 Q and supply by the equation P = 2 + 0.2 Q. The equilibrium quantity is

Camille's Creations and Julia's Jewels both sell beads in a competitive market. If at the market price of $5 both are running out of beads to sell (they can't keep up with the quantity demanded at that price), then we would expect both Camille's and Julia's to