When the market is allowed to operate without interference, price increases will distribute what is available to those who are willing and able to pay the most. This process is known as:

price fixing.

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quantity adjustment.

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quantity setting.

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price rationing.

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Solution

The correct option is C
quantity setting.

Option : (D)

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Similar questions

At the market price of Rs. 10, a firm supplies 4 units of output. The market price increases to Rs. 30. The price elasticity of the firm's supply is 1.25. What quantity will the firm supply at the new price?

At the market price of Rs 10, a firm supplies 4 units of output. The market price increases to Rs 30. The price elasticity of the firm’s supply is 1.25. What quantity will the firm supply at the new price?

If the monopolist firm of Exercise 3, was a public sector firm. The government set a rule for its manager to accept the government fixed price as given (i.e. to be a price taker and therefore behave as a firm in a perfectly competitive market), and the government decide to set the price so that demand and supply in the market are equal. What would be the equilibrium price, quantity and profit in this case?

If price drops and people are not willing to pay increased prices despite having more money, this leads to inflation.

(i) Calculate the equilibrium price and quantity for the demand and supply curves of a particular commodity given by Qd=10-p and Qs=p
(ii) What will happen when the market price is Rs. 7?
(iii) What will happen when the market price is Rs. 3?

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When the market is allowed to operate without interference, price increases will distribute what is available to those who are willing and able to pay the most. This process is known as:

The correct option is C quantity setting. Option : (D)

The correct option is C
quantity setting.

Option : (D)