Figureprice2018+161412108.4+10 20 30 40 50 60 70 80 90 quaxtityRefer to Figure. If price in this market is currently $14, then there would be a(n)O a. shortage 20 units therefore, the price will rise.O b. surplus of 20 units therefore, the price will fall.Os surplus of 40 units therefore, the price will fall.Od. surplus of 40 units therefore, the price will rise.Click Save Al Anstcers to save all answers.ま注

Answered: Figure 1price 20 18 16 14 12 10 6. 4 D…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Figure
price
20
18+
16
14
12
10
8.
4+
10 20 30 40 50 60 70 80 90 quaxtity
Refer to Figure. If price in this market is currently $14, then there would be a(n)
O a. shortage 20 units therefore, the price will rise.
O b. surplus of 20 units therefore, the price will fall.
Os surplus of 40 units therefore, the price will fall.
Od. surplus of 40 units therefore, the price will rise.
Click Save Al Anstcers to save all answers.
ま
注

Expert Solution

Step 1

Perfect competition refers to the situation where there are many buyers and sellers exist in the market. All the firms are selling homogenous goods. Price is fixed by the market demand and supply. Firms and individuals are price taker. Individual firms or individual consumer cannot influence the price. Firms are easily enters and exists to the market.

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