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In competitive markets, a surplus or shortage will: Select one: O A
In competitive markets, a surplus or shortage will: Select one: O A. Cause changes in the quantities demanded and supplied that tend to eliminate the surplus or shortage n O B. Never exist because the markets are always at equilibrium C. Cause changes in the quantities demanded and supplied that tend to intensify the surplus or shortage O D. Cause shifts in the demand and supply curves that tend to eliminate the surplus or shortage
The price elasticity of demand is a measure of the: Select one: O A. Responsiveness of buyers of a good to changes in its price O B. Effect of changes in demand on the price O C. Sensitivity of a good's price to changes in demand O D. Relationship between price and profitability
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Answer
Question 1 ) A. cause changes in the quantities demanded and supplied that tend to eliminate the surplus or shortage.
Option D is wrong as the curves do not shift . There is movement on the same curve . Markets are not always at equilibrium . The change in quantities correct the situations of surplus or shortages.
Question 2) A . Responsiveness of buyers of a good to changes in its price .
P.E.D measures the effect of change in price on quantity demanded of a product and not the other way round . Profitability is irrelevant in regards to P.E.D .
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