Assume that supply decreases slightly and demand decreases greatly. Which of the following will happen?
a. Equilibrium price will fall and equilibrium quantity will rise.
b. Equilibrium price will rise and equilibrium quantity will fall.
c. Equilibrium price will rise and equilibrium quantity will rise.
d. Equilibrium price will fall and equilibrium quantity will fall.
e. Neither equilibrium price nor equilibrium quantity will change.
D
You might also like to view...
When marginal cost is increasing, average total cost must be increasing
a. True b. False Indicate whether the statement is true or false
The light bulbs currently made by a manufacturer currently last 1 year. People place a value of $2.42 on one year's worth of light from a light bulb, and the market rate of interest is 10%. The manufacturer is considering a quality improvement that would make its light bulbs last 3 years. Should the manufacturer make the quality improvement?
a. No, because it will substantially reduce the number of light bulbs sold. b. Yes, as long as it costs less than $2.42 per light bulb. c. Yes, as long as it costs less than $4.20 per light bulb. d. Yes, as long as it costs less than $4.84 per light bulb.
As output expands beyond the break-even point, the vertical distance between the AVC and ATC will
A. get larger. B. remain constant. C. get smaller.
To correct for the externalities, the revenue generated by a corrective tax on steel producers would most likely be used to ______.
a. help the company pay for internalizing the cost b. compensate those harmed by pollution c. expand the firm’s production output d. help lower the market price for consumers