In which of the following situations will both market clearing price and the equilibrium quantity increase?
A. an increase in demand with no change in supply
B. an increase in supply with no change in demand
C. a decrease in supply with no change in demand
D. a decrease in demand with no change in supply
Answer: A
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Four propane delivery firms have a tacit agreement to charge a service fee of $50 in addition to $5 per gallon of propane. If the firms' cost of propane increases and one of the four firms advertises that it will increase the service fee to $75 and raise the cost of a gallon of propane to $5.50 next month, this is an example of ________.
A) a preannouncement B) price leadership C) a meet-the-competition clause D) a precommitment
If the economy is to have built-in stability, when real GDP falls
A. tax revenues and government transfer payments should fall. B. tax revenues and government transfer payments should rise. C. tax revenues should fall and government transfer payments should rise. D. tax revenues should rise and government transfer payments should fall.
In the late 1970s, ________ of all firms were less than a year old. In recent years, ________ were
A) almost half; less than one-quarter B) less than 5 percent; more than 40 percent C) about 16 percent; only about 8 percent D) about 40 percent; about 20 percent
The firm in the above figure has an economic profit of ________
A) $0 B) $80 C) $160 D) more than $161 E) less than zero, that is, the firm has an economic loss