Refer to the information provided in Figure 5.6 below to answer the question that follows.
Figure 5.6Refer to Figure 5.6. The market is initially in equilibrium at Point A and supply shifts from S1 to S2. Which of the following statements is true?
A. Price will still serve as a rationing device causing quantity supplied to exceed 12 thousand pizzas.
B. The market cannot move to a new equilibrium until there is also a change in demand.
C. Price will still serve as a rationing device causing quantity demanded to fall from 12 to 10 thousand pizzas.
D. There is no need for price to serve as a rationing device in this case because the new equilibrium quantity exceeds the original equilibrium quantity.
Answer: C
You might also like to view...
The ERT Company sells lead pencils in a perfectly competitive market for $5 per box of a dozen pencils. The firm currently produces 2,500 boxes of lead pencils each week and average total cost at this level of production is $5.15
What level of profit is this firm earning? Explain.
The OASDI trust fund is projected to sink below zero in ¬¬_____
a. 2012 b. 2021 c. 2033 d. 2045
An index number is important only in a relative sense -- in comparison to an index number from another period
a. True b. False
When two goods are perfect substitutes, the
a. indifference curve is a horizontal straight line. b. marginal rate of substitution is constant. c. indifference curve is a vertical straight line. d. Both a and b are correct.