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The equilibrium quantity in a perfectly competitive market is determined

The equilibrium quantity in a perfectly competitive market is determined:

A) at the point of intersection of the demand and supply curves.

B) at the point of tangency between the demand and supply curves.

C) at the point of intersection of the supply curve and the quantity axis.

D) at the point of intersection of the demand curve and the quantity axis.

2) Which of the following statements correctly describes perfectly competitive market equilibrium?

A) Any deviation from equilibrium is automatically restored.

B) Government intervention is necessary for the market to reach equilibrium.

C) There is always excess supply or excess demand when the market is in equilibrium.

D) Multiple equilibriums are possible for a given set of demand and supply curves.

3) At the competitive equilibrium:

A) the demand curve is tangential to the supply curve.

B) the quantity demanded exceeds the quantity supplied of a good.

C) the quantity supplied exceeds the quantity demanded of a good.

D) the quantity demanded is equal to the quantity supplied of a good.

4) In a perfectly competitive market, the market clearing price:

A) is always equal to the equilibrium price.

B) is unrelated to the equilibrium price.

C) is always lower than the equilibrium price.

D) is always higher than the equilibrium price.

5) A surplus occurs in a market when:

A) demand exceeds supply.

B) price is lower than the equilibrium price.

C) price is higher than the equilibrium price.

D) the marginal cost of production is negligible.

6) At a price of $1 per table, the quantity supplied of tables is 100 units whereas the quantity demanded is 70 units. Given this information, which of the following statements is true?

A) $1 per table is the equilibrium price.

B) $1 per table is the market clearing price.

C) At $1 per table, there is a surplus in the market.

D) At $1 per table, there is a shortage in the market.

7) A shortage occurs in a market when:

A) supply exceeds demand.

B) price is lower than the equilibrium price.

C) price is higher than the equilibrium price.

D) the marginal utility of consumption is negligible.

8) In a perfectly competitive market, situations of surplus or shortage of a good:

A) can exist simultaneously.

B) are permanent phenomena.

C) exist till the government or any ruling authority intervenes.

D) are self-corrected due to the competitive nature of the market.

The following table shows the market demand schedule and supply schedule for notebooks.

 

Price ($/unit)

Quantity Demanded (units)

Quantity Supplied (units)

1

20

4

2

16

6

3

14

10

4

12

12

5

10

14

6

7

17

7

4

20

8

2

22

9

1

25

 

9) Refer to the table above. What is the equilibrium price of notebooks?

A) $2

B) $4

C) $6

D) $7

10) Refer to the table above. What is the equilibrium quantity of notebooks?

A) 4 units

B) 10 units

C) 12 units

D) 20 units

Mar 14 2020 View more View Less

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