The following are subtopics of market price:
- Market price is the price at which a good or service is bought and sold in a competitive market.
- Market price is determined by the interaction of supply and demand.
- Supply is the amount of a good or service that producers are willing and able to sell at different prices.
- Demand is the amount of a good or service that consumers are willing and able to buy at different prices.
- The equilibrium price is the price at which supply and demand are equal.
- The equilibrium quantity is the quantity of a good or service that is bought and sold at the equilibrium price.
- A surplus occurs when the market price is below the equilibrium price.
- A shortage occurs when the market price is above the equilibrium price.
- Price controls are government regulations that set the maximum or minimum price that can be charged for a good or service.
- Price floors are government regulations that set a minimum price for a good or service.
- Price ceilings are government regulations that set a maximum price for a good or service.
- Price controls can lead to shortages, surpluses, and black markets.
- Black markets are illegal markets in which goods and services are bought and sold at prices that are not regulated by the government.
- Market power is the ability of a firm to raise prices above the competitive level without losing all of its customers.
- A monopoly is a market structure in which there is only one seller of a good or service.
- A monopolistic competition is a market structure in which there are many sellers of a good or service that is similar but not identical.
- An oligopoly is a market structure in which there are a few sellers of a good or service.
- Perfect competition is a market structure in which there are many sellers of a good or service that is identical.
- Market failure occurs when the market does not allocate resources efficiently.
- Externalities are costs or benefits that are not paid for by the person who causes them or received by the person who benefits from them.
- Public goods are goods that are non-rivalrous and non-excludable.
- Common goods are goods that are rivalrous but non-excludable.
- Private goods are goods that are rivalrous and excludable.
- Asymmetric information occurs when one party to a transaction has more information than the other party.
- Moral hazard occurs when a person takes more risks because they are insured against the consequences of those risks.
- Adverse selection occurs when people who are more likely to have a problem are more likely to buy insurance.
- A market economy is an economy in which the prices of goods and services are determined by supply and demand.
- A command economy is an economy in which the prices of goods and services are determined by the government.
- A mixed economy is an economy that combines elements of both a market economy and a command economy.
Market price is the price at which a good or service is bought and sold in a competitive market. It is determined by the interaction of supply and demand. Supply is the amount of a good or service that producers are willing and able to sell at different prices. Demand is the amount of a good or service that consumers are willing and able to buy at different prices. The equilibrium price is the price at which supply and demand are equal. The equilibrium quantity is the quantity of a good or service that is bought and sold at the equilibrium price.
A surplus occurs when the market price is below the equilibrium price. This means that producers are willing to sell more goods or services than consumers are willing to buy. As a result, there will be a buildup of unsold goods or services, and prices will tend to fall until the equilibrium price is reached.
A shortage occurs when the market price is above the equilibrium price. This means that consumers are willing to buy more goods or services than producers are willing to sell. As a result, there will be a shortage of goods or services, and prices will tend to rise until the equilibrium price is reached.
Price controls are government regulations that set the maximum or minimum price that can be charged for a good or service. Price floors are government regulations that set a minimum price for a good or service. This means that sellers are not allowed to charge less than the price floor. Price ceilings are government regulations that set a maximum price for a good or service. This means that buyers are not allowed to pay more than the price ceiling.
Price controls can lead to shortages, surpluses, and black markets. A black market is an illegal market in which goods and services are bought and sold at prices that are not regulated by the government.
Market power is the ability of a firm to raise prices above the competitive level without losing all of its customers. A monopoly is a market structure in which there is only one seller of a good or service. A monopolistic competition is a market structure in which there are many sellers of a good or service that is similar but not identical. An oligopoly is a market structure in which there are a few sellers of a good or service. Perfect competition is a market structure in which there are many sellers of a good or service that is identical.
Market failure occurs when the market does not allocate resources efficiently. This can happen for a number of reasons, such as externalities, public goods, common goods, private goods, asymmetric information, moral hazard, and adverse selection.
Externalities are costs or benefits that are not paid for by the person who causes them or received by the person who benefits from them. Public goods are goods that are non-rivalrous and non-excludable. Common goods are goods that are rivalrous but non-excludable. Private goods are goods that are rivalrous and excludable.
Asymmetric information occurs when one party to a transaction has more information than the other party. Moral hazard occurs when a person takes more risks because they are insured against the consequences of those risks. Adverse selection occurs when people who are more likely to have a problem are more likely to buy insurance.
A market economy is an economy in which the prices of goods and services are determined by supply and demand. A command economy is an economy in which the prices of goods and services are determined by the government. A mixed economy is an economy that combines elements of both a market economy and a command economy.
Market price is the price at which a good or service is bought and sold in a competitive market. It is determined by the interaction of supply and demand.
Supply is the amount of a good or service that producers are willing and able to sell at different prices. It is determined by the costs of production, the prices of other goods and services, and the expectations of producers.
Demand is the amount of a good or service that consumers are willing and able to buy at different prices. It is determined by the prices of other goods and services, the incomes of consumers, and the preferences of consumers.
The equilibrium price is the price at which supply and demand are equal. At the equilibrium price, the quantity supplied is equal to the quantity demanded.
The equilibrium quantity is the quantity of a good or service that is bought and sold at the equilibrium price.
A surplus occurs when the market price is below the equilibrium price. At a price below the equilibrium price, producers are willing to supply more than consumers are willing to buy. This leads to a surplus of goods or services.
A shortage occurs when the market price is above the equilibrium price. At a price above the equilibrium price, consumers are willing to buy more than producers are willing to supply. This leads to a shortage of goods or services.
Price controls are government regulations that set the maximum or minimum price that can be charged for a good or service.
Price floors are government regulations that set a minimum price for a good or service. Price floors are often used to protect farmers and other producers from low prices.
Price ceilings are government regulations that set a maximum price for a good or service. Price ceilings are often used to protect consumers from high prices.
Price controls can lead to shortages, surpluses, and black markets.
A black market is an illegal market in which goods and services are bought and sold at prices that are not regulated by the government.
Market power is the ability of a firm to raise prices above the competitive level without losing all of its customers.
A monopoly is a market structure in which there is only one seller of a good or service. A monopoly has a great deal of market power because there are no other firms to compete with it.
A monopolistic competition is a market structure in which there are many sellers of a good or service that is similar but not identical. Monopolistic competition is characterized by product differentiation and free entry and exit.
An oligopoly is a market structure in which there are a few sellers of a good or service. Oligopolies are characterized by interdependence and barriers to entry.
Perfect competition is a market structure in which there are many sellers of a good or service that is identical. Perfect competition is characterized by perfect information, free entry and exit, and no barriers to entry.
Market failure occurs when the market does not allocate resources efficiently. Market failure can occur due to externalities, public goods, common goods, private goods, asymmetric information, moral hazard, and adverse selection.
Externalities are costs or benefits that are not paid for by the person who causes them or received by the person who benefits from them. Externalities can be positive or negative.
Public goods are goods that are non-rivalrous and non-excludable. Non-rivalrous goods are goods that can be consumed by more than one person at the same time without reducing the amount available for others to consume. Non-excludable goods are goods that it is difficult or impossible to prevent people from consuming.
Common goods are goods that are rivalrous but non-excludable. Rivalrous goods are goods that can only be consumed by one person at a time. Non-excludable goods are goods that it is difficult or impossible to prevent people from consuming.
Private goods are goods that are rivalrous and excludable. Rivalrous goods are goods that can only be consumed by one person at a time. Excludable goods are goods that it is easy or possible to prevent people from consuming.
Asymmetric information occurs when one party to a transaction has more information than the other party. Asymmetric information can lead to problems such as moral hazard and adverse selection.
Moral hazard occurs when a person takes more risks because they are insured against the consequences of those risks. For example, a person who has health insurance may be more likely to take risks that could lead to illness or injury.
Adverse selection occurs when people who are more likely to have a problem are more likely to buy insurance. For example, people who are more likely to get sick are more likely to buy health insurance.
A market economy is an economy in which the prices of goods and services
Question 1
The price at which a good or service is bought and sold in a competitive market is called the:
(A) equilibrium price
(B) market price
(C) supply price
(D) demand price
Answer: (B)
Explanation: The market price is the price at which supply and demand are equal.
Question 2
The amount of a good or service that producers are willing and able to sell at different prices is called the:
(A) supply
(B) demand
(C) equilibrium price
(D) market price
Answer: (A)
Explanation: Supply is the amount of a good or service that producers are willing and able to sell at different prices.
Question 3
The amount of a good or service that consumers are willing and able to buy at different prices is called the:
(A) supply
(B) demand
(C) equilibrium price
(D) market price
Answer: (B)
Explanation: Demand is the amount of a good or service that consumers are willing and able to buy at different prices.
Question 4
The price at which supply and demand are equal is called the:
(A) equilibrium price
(B) market price
(C) supply price
(D) demand price
Answer: (A)
Explanation: The equilibrium price is the price at which supply and demand are equal.
Question 5
The quantity of a good or service that is bought and sold at the equilibrium price is called the:
(A) equilibrium price
(B) market price
(C) supply price
(D) demand price
Answer: (C)
Explanation: The equilibrium quantity is the quantity of a good or service that is bought and sold at the equilibrium price.
Question 6
When the market price is below the equilibrium price, there is a:
(A) surplus
(B) shortage
(C) equilibrium
(D) none of the above
Answer: (A)
Explanation: When the market price is below the equilibrium price, there is a surplus of the good or service.
Question 7
When the market price is above the equilibrium price, there is a:
(A) surplus
(B) shortage
(C) equilibrium
(D) none of the above
Answer: (B)
Explanation: When the market price is above the equilibrium price, there is a shortage of the good or service.
Question 8
Government regulations that set the maximum or minimum price that can be charged for a good or service are called:
(A) price controls
(B) price floors
(C) price ceilings
(D) none of the above
Answer: (A)
Explanation: Price controls are government regulations that set the maximum or minimum price that can be charged for a good or service.
Question 9
Government regulations that set a minimum price for a good or service are called:
(A) price controls
(B) price floors
(C) price ceilings
(D) none of the above
Answer: (B)
Explanation: Price floors are government regulations that set a minimum price for a good or service.
Question 10
Government regulations that set a maximum price for a good or service are called:
(A) price controls
(B) price floors
(C) price ceilings
(D) none of the above
Answer: (C)
Explanation: Price ceilings are government regulations that set a maximum price for a good or service.
Question 11
Price controls can lead to:
(A) shortages
(B) surpluses
(C) black markets
(D) all of the above
Answer: (D)
Explanation: Price controls can lead to shortages, surpluses, and black markets.
Question 12
An illegal market in which goods and services are bought and sold at prices that are not regulated by the government is called a:
(A) price control
(B) price floor
(C) price ceiling
(D) black market
Answer: (D)
Explanation: A black market is an illegal market in which goods and services are bought and sold at prices that are not regulated by the government.