Asked by Hannah Silene on Jul 14, 2024
Verified
In a purely competitive market, how would a surplus of a product be eliminated?
A) The price of the product would decrease.
B) The price of the product would increase.
C) The quantity supplied of the product would increase.
D) The quantity demanded for the product would decrease.
Purely Competitive Market
A market structure characterized by a large number of small firms, a homogeneous product, free entry and exit, and perfect information.
Surplus
The situation in which the quantity of a good or service supplied exceeds the quantity demanded at the current price.
- Appreciate the implications of agricultural policy on the economic dynamics of production and consumption.
Verified Answer
DB
Deanna BermudezJul 18, 2024
Final Answer :
A
Explanation :
In a purely competitive market, a surplus of a product indicates that the quantity supplied exceeds the quantity demanded at the current price. To eliminate the surplus, the price of the product would decrease, which would increase the quantity demanded and decrease the quantity supplied until equilibrium is reached.
Learning Objectives
- Appreciate the implications of agricultural policy on the economic dynamics of production and consumption.
Related questions
The Federal Government Has Tried to Eliminate Agricultural Surpluses by ...
Government and Private Efforts to Promote the Production of Gasohol ...
The Agricultural Act of 2018 Ended the Crop Insurance Programs ...
The Agricultural Act of 2014 Created Two New Crop Insurance ...
The Agricultural Act of 2014 Expanded the Direct Payments, Countercyclical ...