Factors Influencing Economic Supply and Demand Quiz

Factors influencing consumer preferences and purchasing decisions do not include production costs.

The cost of inputs directly affects the quantity of goods a producer is willing to supply.

Consumers generally buy less of a good as its price rises.

Supply is influenced by production-related factors, not consumer choices.

Producers are more willing to supply goods at higher prices, leading to an upward-sloping supply curve.

Simultaneous increases in demand and supply lead to higher prices and quantities in equilibrium.

Market equilibrium is achieved when the quantity demanded by consumers matches the quantity supplied by producers.

Changes in price can impact consumers' real purchasing power, influencing their buying decisions.

An elasticity of 1.0 indicates a proportionate response, where a 10% price increase results in a 5% decrease in quantity demanded.

Consumers' expectations about future prices can influence their current buying decisions.

A lower price for a substitute encourages consumers to switch, increasing demand for the original good.

A perfectly elastic demand curve shows that consumers are willing to buy any quantity at a given price.

In a monopoly, a single firm dominates the market, allowing it significant control over pricing.

Profit maximization occurs when the additional revenue from selling one more unit equals the additional cost of producing that unit.

A decrease in demand and an increase in supply lead to lower prices and quantities in equilibrium.