If the supply of a product decreases and the demand for that product simultaneously increases, then equilibrium:
A. price must rise, but equilibrium quantity may rise, fall, or remain unchanged.
B. price must rise and equilibrium quantity must fall.
C. price and equilibrium quantity must both increase.
D. price and equilibrium quantity must both decline.
Answer: A
You might also like to view...
The demand curve for Widgets is given by QD = 6000 - 2y - 200p + 30pG, where QD is the quantity of widgets demanded, y is the per capita income and pG is the price of Gizmos. Compute the partial derivatives with respect to y and pG
What will be an ideal response?
According the traditional Keynesian approach, an increase in government spending is effective in raising real Gross Domestic Product (GDP) if
A) the price level is fixed. B) the price level is flexible. C) the price level does not exist. D) Ricardian equivalence occurs, regardless of the price level.
If a regulatory commission sets the regulated price equal to marginal cost for a natural monopoly:
a. losses will result. b. government subsidies will be unnecessary. c. the firm will earn economic profits. d. new firms will want to enter. e. resource use will not be optimal.
Antitrust legislation prohibits a person from being on the board of directors of more than one firm at any time
Indicate whether the statement is true or false