Which of the following definitely results in a product's equilibrium price rising?
A) an increase in both demand and supply
B) a decrease in both demand and supply
C) an increase in demand combined with a decrease in supply
D) a decrease in demand combined with an increase in supply
E) an increase in the supply combined with no change in the demand
C
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Signaling takes place in markets with ________
A) asymmetric information B) positive externalities C) negative externalities D) perfect competition
Refer to Figure 2-16. One segment of the circular flow diagram in the figure shows the flow of goods and services from market C to economic agents A. What is market C and who are economic agents A?
A) C = factor markets; A = households B) C= product markets; A = firms C) C = factor markets; A = firms D) C = product markets; A = households
As the number of firms in a market decreases, the supply curve will shift to the left and the equilibrium price will rise
Indicate whether the statement is true or false
The initial price of a cup of coffee is $1, and at that price, 400 cups are demanded. If the price falls to $0.90, the quantity demanded will increase to 500
a. Calculate the (arc) price elasticity of demand for coffee. b. Based on your answer, is the demand for coffee elastic or inelastic? c. Based on your answer to a., if the price of coffee is increased by 10%, what will happen to the revenues from coffee? Carefully explain how you know.