A company in China manufactures basketballs. A company in the United States buys the basketballs and resells them to people there. What term best describes the U.S. company?
a. importer (?)
b. exporter
c. producer
d. consumer
Equilibrium prices are achieved when ________________.
a. demand is greater than supply.
b. sellers break even.
c. supply equals demand. (?)
d. supply is greater than demand.
a and c.
To determine the term that best describes the U.S. company in the given scenario, we need to understand the roles and activities of the company. The U.S. company is buying basketballs from China and reselling them to people in the United States. Based on this information, the term that best describes the U.S. company is an "importer" (option a).
Next, let's consider the statement about equilibrium prices. Equilibrium prices occur in a market when supply and demand are balanced.
a. "Demand is greater than supply" does not describe equilibrium prices because this indicates an excess demand or shortage situation.
b. "Sellers break even" is not directly related to equilibrium prices but rather refers to the point where revenue equals costs.
c. "Supply equals demand" best describes the condition for equilibrium prices, where the quantity of goods or services supplied match the quantity demanded. This is the correct answer (option c).
d. "Supply is greater than demand" describes a situation of excess supply or surplus.
Therefore, the correct term to describe the U.S. company is an importer, and the condition for equilibrium prices is when supply equals demand.