Price And Quantity Determination Under Perfect Competition - SS2 Economics Past Questions and Answers - page 1
In perfect competition, who determines the market price of a good or service?
Producers
Consumers
Both producers and consumers
No one, it is determined by market forces
What is the point at which the supply and demand curves intersect called?
Equilibrium price and quantity
Market price and quantity
Surplus and shortage
Elasticity of demand
In perfect competition, what type of power do producers have in setting the price of a good or service?
Market power
Monopoly power
Price setting power
No power
What happens to the price of a good or service when there is a surplus in the market?
It increases
It decreases
It stays the same
It is impossible to predict
At what point do producers in perfect competition produce and sell the quantity that maximizes their profits?
Where their marginal cost equals the market price
Where their marginal revenue equals the market price
Where their average cost equals the market price
Where their total revenue equals the market price
Define perfect competition.
Who determines the market price and quantity of a good or service?
The market for pizza in perfect competition is characterized by a demand curve given by Qd = 150 - 3P and a supply curve given by Qs = 30P + 10. What is the equilibrium price and quantity of pizza in this market?