Consider a market that is in equilibrium. If it experiences both an increase in demand and a decrease in supply, what can be said of the new equilibrium? The equilibrium:
A. price and quantity will both rise.
B. quantity will definitely rise, while the equilibrium price cannot be predicted.
C. price will definitely rise, while the equilibrium quantity cannot be predicted.
D. price and quantity will both fall.
C. price will definitely rise, while the equilibrium quantity cannot be predicted.
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When economists assume that people are rational and respond to incentives, they mean
A) people act with kindness. B) people act in their own self-interest. C) people are altruistic. D) people are selfish.
Financial capital is money raised by business owners to fund new business ventures
Indicate whether the statement is true or false
What is the formula for the present value of $1 one year from now? If the rate of interest is 5 percent, what is the present value of $10 to be paid one year from now?
What will be an ideal response?
If both supply and demand decrease and the shift in demand dominates, which of the following happens? a. The equilibrium quantity increases. b. The equilibrium price and the equilibrium quantity decrease. c. The equilibrium price decreases and equilibrium quantity increases. d. The equilibrium quantity increases and the equilibrium price change is indeterminate
e. The equilibrium price increases and the equilibrium quantity decreases.