18.5k views
5 votes
If the price of the supply line is $6 and the quantity is 4 units what does this mean

A) The highest price sellers will accept to produce 4 units is $6 per unit.
B) The highest price buyers will pay for 4 units is $6 per unit.
C) The lowest price buyers will pay for 4 units is $6 per unit.
D) The lowest price sellers will accept to produce 4 units is $6 per unit.

1 Answer

7 votes

Final answer:

The price of $6 and quantity of 4 units means that the lowest price sellers will accept to produce 4 units is $6 per unit, indicating their minimum acceptable compensation for production.

Step-by-step explanation:

If the price of the supply line is $6 and the quantity is 4 units, this indicates option D: The lowest price sellers will accept to produce 4 units is $6 per unit. This signifies that sellers will not be willing to supply these units at a price lower than $6 each, indicating their minimum acceptable compensation to cover costs and provide an incentive for production.

When examining changes in the supply and demand, the interactions between price and the quantity supplied or demanded are crucial. For example, if consumers are willing to purchase 12 units at a price of $2 each, then suppliers will decide how much to produce based on their supply function, considering this price level. It is important to differentiate between the sellers' willingness to produce (supply) and the buyers' willingness to purchase (demand), as the question relates to the sellers' perspective.

User Nitya
by
8.8k points