Deteminants of the price of a good/service in a market
quiz
- Created by: Lottie
- Created on: 19-12-11 17:43
Other questions in this quiz
2. Is it true that you must get rid of excess supply and if there is excess demand you must get more supply?
- True
- False
3. What is consumer surplus?
- extra money that people are prepared to pay for a good/service that is more than what they actually pay
- extra money paid to producers above what they are willing to accept to supply a good/service
4. What is producer surplus?
- extra money paid to producers above what they are willing to accept to supply a good/service
- extra money that people are prepared to pay for a good/service that is more than what they actually pay
5. Why can price mechanism be seen as a rationing device?
- increased price increases the incentive to supply as more profit is to be made
- it allocates goods/services to those willing to pay
- it indicates changes in demand or supply
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