In a Perfectly Competitive Market or industry, the equilibrium price is determined <u>by the forces of demand and supply.</u> Equilibrium signifies a state of balance where the two opposing forces operate subsequently. An equilibrium is typically a state of rest from which there is no possibility to change the system.
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Answer:
If both demand and supply increase by the same amount, the output level will increase while price will remain same.
If increase in demand is greater than increase in price then price and output both will increase.
If increase in supply is greater than increase in demand, price will decline while output will increase.
Explanation:
The changes in the price and quantity of salsa depending on the degree of change in supply and demand. In case both the variables increase by the same proportion, the price will remain the same while quantity will increase.
In case the increase in demand is more than increase in supply it would cause the price to increase because of excess demand. At the same time, the quantity will increase as well.
In case the increase in supply is more than increase in demand, the price will fall due to excess supply. The output will increase as well.
Answer:
1,950,000 grams
Explanation:
The computation of the material should be purchased is given below:
Raw materials purchased is
= Ending inventory of raw materials + Materials to be used - Beginning Inventory of raw materials
where,
Raw materials to be used = units produced × 7 grams
Units produced is
= Ending inventory of finished goods + units sold - beginning inventory of finished goods
= 30,000 units + 270,000 units - 20,000 units
= 280,000
Now raw materials used is
= 280,000 × 7 grams
= 1,960,000 grams
Now
Materials purchased = Ending inventory of raw materials + Materials to be used - Beginning Inventory of raw materials
= 40,000 grams + 1,960,000 grams - 50,000 grams
= 1,950,000 grams