GK
BUSINESS MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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the producer makes a reasonable profit
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the producer sells at a manageable loss
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consumer demand begins to drop
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the producer can no longer meet costs
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Detailed explanation-1: -Market prices are dependent upon the interaction of demand and supply. An equilibrium price is a balance of demand and supply factors. There is a tendency for prices to return to this equilibrium unless some characteristics of demand or supply change.
Detailed explanation-2: -The law of supply says that a higher price will induce producers to supply a higher quantity to the market. Because businesses seek to increase revenue, when they expect to receive a higher price for something, they will produce more of it.
Detailed explanation-3: -An equilibrium price, also known as a market-clearing price, is the consumer cost assigned to some product or service such that supply and demand are equal, or close to equal. The manufacturer or vendor can sell all the units they want to move and the customer can access all the units they want to buy.
Detailed explanation-4: -An equilibrium price (also known as a “market-clearing” price) is one at which each producer can sell all he wants to produce and each consumer can buy all he demands. Naturally, producers always would like to charge higher prices.