Understanding Markets and Industry Changes

Question 1

Movement along the demand curve is when

Answer 1

price increases, quantity demanded decreases

Question 2

A controllable factor is something that

Answer 2

affects demand that a company can control

Question 3

A firm can manipulate controllable factors to

Answer 3

increase demand on products

Question 4

An uncontrollable factor is something that affects

Answer 4

demand that a company cannot control

Question 5

Supply curves describe

Answer 5

the behaviors of a group of sellers and tell you how much will be sold at a given price

Question 6

Supply curves slope upward,

Answer 6

the higher the price, the higher quantity supplied

Question 7

Market equilibrium is the price

Answer 7

at which quantity supplied equals quantity demanded

Question 8

Excess supply exerts

Answer 8

downward pressure on price

Question 9

Excess demand exerts

Answer 9

upward pressure on price

Question 10

When supply and demand are equal

Answer 10

the equilibrium price is obtained

Question 11

In market equilibrium,

Answer 11

there are no unconsummated wealth-creating transactions

Question 12

The mechanism driving price to equilibrium is

Answer 12

competition among buyers to buy and sellers to sell

Question 13

Prices are the primary mechanism

Answer 13

that market participants use to communicate with one another

Question 14

A market has a product, geographic,

Answer 14

and time dimension

Question 15

Market demand describes

Answer 15

buyer behavior

Question 16

Market supply describes

Answer 16

seller behavior

Question 17

If prices change, quantity demanded increases or decreases

Answer 17

by a movement along the demand curve

Question 18

Prices convey valuable information;

Answer 18

high prices tell buyers to conserve and sellers to increase supply

Question 19

Making a market is costly, and competition

Answer 19

between market makers forces the bid-ask speed down to the costs of making a market are large