Assume that the demand curve for DVD players shifts to the left and the supply curve for DVD players shifts to the right, but the supply curve shifts less than the demand curve. As a result,
A) both the equilibrium price and quantity of DVD players will decrease.
B) the equilibrium price of DVD players will decrease; the equilibrium quantity may increase or decrease.
C) the equilibrium price of DVD players may increase or decrease; the equilibrium quantity will increase.
D) the equilibrium price of DVD players will decrease; the equilibrium quantity will increase.
A
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If the local pizzeria raises the price of a medium pizza from $6 to $10 and quantity demanded falls from 700 pizzas a night to 100 pizzas a night, the arc price elasticity of demand for pizzas is:
A) 0.67. B) 1.5. C) 2.0. D) 3.0.
If a bank buys securities, its
A) net worth increases. B) net worth decreases. C) reserves increase. D) reserves decrease.
In the above figure, if the firm is producing Q1 units at a price P1, the firm should
A) increase output and decrease price. B) decrease output and increase price. C) not change output or price. D) shut down.
Inferior goods are also known as substitute goods.
Answer the following statement true (T) or false (F)