MindTap Economics, 1 term (6 months) Printed Access Card for Mankiw's Principles of Macroeconomics, 8th (MindTap Course List)
8th Edition
ISBN: 9781337096591
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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Students have asked these similar questions
Why is equilibrium the
best guideline for
pricing a product?
A. It is the best way to set the
price without knowing the
market demand.
B. It is the only way to know for
certain that you will not end up
with a surplus of product.
C. It is a number-based
agreement between customer
and producer to set price versus
demand.
If the price of a good starts out below the equilibrium price without a price control, then
(please choose all the answers that are correct)
A.
suppliers will supply less, pushing the price down
B.
consumers will compete to bid the price up
C.
suppliers will compete to bid the price up
D.
the market starts with a surplus of supply over demand
E.
consumers will demand more than the equilibrim quantity
The demand for a product is likely to be more elastic:
A. when a product is a necessity.
B. the less time that passes.
C. when a product has more substitutes available.
D. when the market for a product is less narrowly defined.
E. both a and b.
Chapter 7 Solutions
MindTap Economics, 1 term (6 months) Printed Access Card for Mankiw's Principles of Macroeconomics, 8th (MindTap Course List)
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Similar questions
- Buyers as a group determine supply, and sellers as a group determine the demand of the product a. True b. Falsearrow_forward1.4 If the price is set at R10, the market will A. experience a surplus (excess supply) of 50. B. experience a surplus (excess supply) of 40. C. experience a shortage (excess demand) of 40. D. experience a shortage (excess demand) of 10. E. still be in equilibrium. 1.5 If the price elasticity of demand is 1.6 and a firm increases the price of its product by 10%, it would expect its total revenue to A. decrease by 16%. B. increase by 16%. C. increase by 6%. D. remain constant. E. decrease by 6%. 1.6 Nash equilibrium can be defined as the competitive outcome where A. all firms set prices equal to average cost and all firms make economic profit. B. each firm sets a price equal to marginal cost and each firm makes economic profit. C. each firm sets a price higher than marginal cost and each firm makes economic profit. D. each firm sets a price lower than marginal cost and each firm makes economic profit. E. firms set a price lower than average cost and all firms make economic profit. 1.7…arrow_forwardQ.1.7 If there is a strike in the milk production industry, then, ceteris paribus; (a) the demand for milk will increase.(b) the demand for milk will decrease.(c) the supply of milk will decrease.(d) the supply of milk will increase. Q.1.8 An increase in demand: (a) indicates that more is demanded at higher prices.(b) indicates that more is demanded at lower prices.(c) is illustrated by a rightward shift of the demand curve.(d) is illustrated by a leftward shift of the demand curve.arrow_forward
- When 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_forwardChoose 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 quantityarrow_forwarda. Demand for good Q is estimated to be Q = 14 - P, where P is price. If the prices rises from P = $3 to P = $6, then the lost revenue due to the quantity effect is b. A firm selling a product Q faces a demand where Q = 24 - P, where P is price. If the firm lowers the price from P = $20 to P = $16, then the lost revenue due to the price effect isarrow_forward
- Give typing answer with explanation and conclusion Explain carefully why, in a competitive market, a quantity less than the equilibrium quantity is inefficient.arrow_forwardIf 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_forwardQuestion 9arrow_forward
- The X-Corporation produces a good (called X) that is a normal good. Its competitor, Y-Corp., makes a substitute good that it markets under the name Y. Good Y is an inferior good. a. How will the demand for good X change if consumer incomes decrease? b. How will the demand for good Y change if consumer incomes increase? c. How will the demand for good X change if the price of good Y increases? d. Is good Y a lower-quality product than good X? Explain.arrow_forwardConsider the supplier of a product that is an inferior good. For instance, an aluminum supplier for a canned goods producer. During a recession during which average incomes fall, which of the following best describes what would happen to the profit-maximizing price of the supplier? a. The supplier’s profit-maximizing price would decrease due to an increase in demand. b. The supplier’s profit-maximizing price would increase due to an increase in demand. c. The supplier’s profit-maximizing price would decrease due to a reduction in demand. d. The supplier’s profit-maximizing price would increase due to a reduction in demand.arrow_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_forward
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