Assume that an inferior good is produced in a perfectly competitive, increasing-cost industry with external diseconomies. The market is initially in long-run equilibrium. After all long-run adjustments are made, which of the following would occur in this market as a result of an increase in consumers' incomes?
a. The market price would remain unchanged; the market quantity would rise.
b. The market price would rise; the market quantity would fall.
c. The market price would remain unchanged; the market quantity would fall.
d. Both the market price and the market quantity would fall.
e. Both the market price and the market quantity would rise.
D
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Used cars in Poorland sold for about 20% less than new cars of the same model manufactured in the same year. However, price differences were reduced when certified used-car dealers entered into the market for used cars in Poorland
What explains this phenomenon?
The Human Genome Project is a useful example of
a. private sector research and development. b. government-conducted research. c. household research. d. a and b.
Technology is defined as
A) the maximum output which can be attained from a stock of physical capital. B) society’s pool of applied knowledge concerning the production of goods and services. C) output beyond the production possibilities boundary. D) the utilization of the most advanced machinery.
Answer the following questions true (T) or false (F)
1. Occupational licensing is an example of an entry barrier that improves a country's standard of living. 2. The barrier to entry that allowed Alcoa to make persistent economic profits was ownership of an essential input. 3. If firms are protected by substantial barriers to entry, short-run profits can turn into long-run profits.