What would happen to the equilibrium price and quantity of lattés if coffee shops began using a machine that reduced the amount of labor necessary to produce them?
a. Both the equilibrium price and quantity would increase.
b. Both the equilibrium price and quantity would decrease.
c. The equilibrium price would increase, and the equilibrium quantity would decrease.
d. The equilibrium price would decrease, and the equilibrium quantity would increase.
d
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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.
Which of the following serve as automatic stabilizers?
a. Transfer payments b. Prices c. Imports d. All of the above serve as automatic stabilizers e. None of the above serve as automatic stabilizers
Suppose the economy is in a prosperity phase of the business cycle. Employment is high and in the month of August, new demand deposits amounted to $15,000 billion, which supported a total increase (including the $15 billion) of $75,000 billion, which is the maximum allowable. The potential money multiplier, then,
a. must be 5 b. must be 2 c. must be 0.50 d. must be 0.20 e. cannot be determined from the information given
According to George Stigler, the monopolist is distinguished from other entrepreneurs because of his or her
a. motivation b. market position c. profit objective d. strategy e. morality