1) What does the equilibrium price represent? a) The price at which supply exceeds demand b) The price at which demands exceeds supply c) The price where supply equals demand d) The maximum possible price for a product 2) Which of the following is an external factor affecting demand? a) Cost of production b) Advertising strategies c) Government regulations d) Product development 3) What is the primary purpose of the price mechanism in a market economy? a) To maximize profits for producers b) To ensure government control over prices. c) To allocate resources efficiently d) To fix prices artificially 4) Which of the following describes a demand factor? a) The cost of raw materials b) Customer income levels c) The production capacity of factories d) Promotion campaigns 5) If the government imposes a price ceiling below the equilibrium price, what is the most likely result? a) Surplus b) Shortage c) Equilibrium d) No impact on the market 6) Which graph represents the intersection of supply and demand curves? a) Price-Quantity Equilibrium b) Cost Analysis c) Profit-Maximization Curve d) Demand Elasticity Diagram 7) The effect of advertising on pricing is primarily linked to: a) Cost factors b) Internal production factors c) Demand factors d) Equilibrium price mechanisms 8) Competitor costs and pricing do not influence the price mechanism in any way. a) True b) False 9) Demand and supply shifts can change the equilibrium price. a) True b) False

Price determination

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