Refer to Figure 3-8. The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D2 and S1 (point C)
If the price of motorcycle side cars (a complement to motorcycles) decreases, and the wages of motorcycle workers increase, how will the equilibrium point change?
A) The equilibrium point will move from C to A.
B) The equilibrium point will move from C to B.
C) The equilibrium will first move from C to A, then return to C.
D) The equilibrium point will move from C to E.
B
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Which of the following is a true statement about the multiplier?
a. The multiplier rises as the MPC rises. b. The smaller the MPC, the larger the multiplier. c. The multiplier is a value between zero and one. d. The multiplier effect does not occur when autonomous expenditure decreases.
Which of the following would create a natural monopoly?
A) ownership of all the available units of a necessary input B) an exclusive right granted to supply a good or service C) requirement of a government license before the firm can sell the good or service D) technology enabling a single firm to produce at a lower average total cost than two or more firms E) a patent granted the producer of the good or service
The monopolist faces the market demand curve
a. True b. False Indicate whether the statement is true or false
In the United States, traffic collisions have very low external costs.
Answer the following statement true (T) or false (F)