Which of the following statements is true?
A) If both demand and supply increase there must be an increase in equilibrium price; equilibrium quantity may either increase or decrease.
B) An increase in demand causes a change in equilibrium price; the change in price does not cause a further change in demand or supply.
C) If demand decreases and supply increases one cannot determine if equilibrium price will increase or decrease without knowing which change is greater.
D) A decrease in supply causes equilibrium price to rise; the increase in price then results in a decrease in demand.
B
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The opportunity cost of current consumption is:
A) nominal wage rate. B) the inflation rate. C) real wage rate. D) the real interest rate.
In making a production decision, a business owner:
A.) Decides whether to enter or exit the market. B.) Makes a long-run decision about output and revenues. C.) Decides whether to buy or lease new plant and equipment. D.) Decides the short-run rate of output.
A trade deficit occurs when:
A. government revenue exceeds government spending. B. exports are less than imports. C. exports exceed imports. D. government spending exceeds government revenue.
Assuming a perfectly competitive market implies that households have perfect knowledge of qualities and prices of everything available in the market.
Answer the following statement true (T) or false (F)