A change in an equilibrium price can result from
I. A change in demand
II. A change in supply
A) I only
B) II only
C) Both I and II
D) Neither I nor II
Answer: C
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Define the terms legal incidence and economic incidence. When the legal incidence of a tax is changed, how does this affect the economic incidence of the tax? Why does this result occur?
What will be an ideal response?
An increase in the number of producers will:
a. increase the market supply, because the price will rise. b. increase the market supply only when market demand increases too. c. increase the market supply, because market supply is the sum of all individual supply curves. d. increase the market supply only if each supplier has an identical supply curve. e. decrease the market supply, because firms compete with each other and each firm will supply more.
The economy's money supply curve is vertical
a. True b. False
If the short-run Phillips curve is fairly horizontal, attempts to fight inflation will generate considerable unemployment
a. True b. False Indicate whether the statement is true or false