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When is the market in short run equilibrium?
When the sellers and buyers agree on a price, and the price is stable, in the short run.
What happens if a call option expires in the money?
If a call option expires in the money, the option holder can buy the underlying asset at the strike price, which is lower than the current market price. This allows the holder to make a profit by selling the asset at the higher market price.
What will happen if an individual perfectly competitive firm charges a price above the industry equilibrium price?
If an individual in a perfectly competitive firm charges a price above the industry equilibrium price this is bad. This company will go out of business quickly because their customers will go find the lower price.
1 What can be said about the market price when a good is in surplus?
In a surplus, the market price will be lower. Since there are many options for consumers, they will want to pay the lowest price.
What happens if my call option expires in the money?
If your call option expires in the money, you have the right to buy the underlying asset at the strike price. This means you can purchase the asset at a lower price than its current market value, potentially resulting in a profit.
What happens when the equilibrium price is lower than the market price?
When the market price is lower than the equilibrium price the price of the product will continue to rise. The price will rise until it equal the equilibrium price.
A shortage will develop when?
The market price is below the equilibrium price.
A shortage develop when?
The equilibrium quantity supplied is lower than the actual quantity supplied. The market price is below the equilibrium price.
What happens on equilibrium price when the government impose tax on goods?
if there is equilibrium in the market and the govt. fixes the price then there would be the dead weight loss.
A government-set price ceiling will lower equilibrium price and quantity in a market?
A surplus of goods occur
What happens to the equilibrium price and equilibrium quantity in a market if the demand curve shifts to the right?
If the demand shift to the right, the equilibrium price and quantity will shift from the initial equilibrium price and quantity to the next, i mean the equilibrium price and quantity will increase as compare to the first.
If a binding price ceiling is imposed in a market?
nothing happens to the market since it will naturally move towards the equilibrium
What happens is the price falls below the market clearing price and there is no equilibrium?
Quantity of demand increases and supplies decreases.
What would the equilibrium price and quantity be in a oligopoly market?
In an oligopoly market, the equilibrium price and quantity are determined by the interdependent pricing and output decisions of a few dominant firms. These firms often engage in strategic behavior, such as price collusion or price wars, which can lead to higher prices and lower quantities compared to a competitive market. The equilibrium is reached when firms balance their production levels with market demand while considering their competitors' actions. As a result, the equilibrium price may be higher and the quantity lower than in more competitive market structures.
Where is the price ceiling located on a graph depicting market equilibrium?
The price ceiling is located below the equilibrium price on a graph depicting market equilibrium.
Why is a price ceiling a distortion of the price mechanism?
price ceiling makes a bar on the equilibrium prices. it compels the suppliers to charge the ceiling price from the consumers. it is generally lower than the equilibrium price. at this price quantity supplied is less than the quantity demanded and the market is not in equilibrium.
How does an increase in supply affect the market equilibrium when the supply curve shifts to the right?
When the supply curve shifts to the right, it means there is an increase in supply. This leads to a lower equilibrium price and a higher equilibrium quantity in the market.
