Social Studies

Question

1. Why do businesses seek an equilibrium price?
A. It ensures that competitors cannot offer lower prices
B. It attracts the largest possible number of consumers to the business
C. It provides the highest possible prices that consumers will pay for each product
D. It prevents shortages and surpluses by producing the right number of goods for the right price.
2. What is a reason that market prices are not always the same as equilibrium prices?
A. Market prices are often set by buyers rather than by sellers
B. Supply and demand are not well-understood by business owners
C. The equilibrium is not always the most profitable price point
D. Market prices sometimes reflect the relative prices of competitors rather than equilibrium
3. How do markets keep producers from increasing prices?
A. Higher prices cause demand shifts
B. Higher prices cause supply shifts
C. Higher prices decrease quantity sold
D. Higher prices decrease consumer demand

1 Answer

  • 1. I think businesses seek an equilibrium price because D. It prevents shortages and surpluses by producing the right number of goods for the right price. Equilibrium price is the market price where goods supplied are meeting goods demanded. It's the point where supply intersects demand.

    2. I think the main reason why market prices are not always the same as equilibrium prices is: A. Market prices are often set by buyers rather than by sellers. Equilibrium price is a compromise between supply and demand. But the market price can be higher because sometimes customers ready to pay more, because they think like that: "more expensive=better".

    3. I am definitely sure that this is the answer: B. Higher prices cause supply shifts. Higher price = less consumer demand. Consumers won't pay more for the same product if they know that it could be cheaper than its market price. Consumer demand is very important in forming market prices.

NEWS TODAY