When the supply of a product increases but the demand for the product remains unchanged, the equilibrium price of the product will
a. fall, and equilibrium quantity will decrease.
b. be unaffected.
c. first rise and then return to the original price level.
d. fall, and equilibrium quantity will increase.
d. fall, and equilibrium quantity will increase.
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According to the BEA, in the second quarter of 2012 personal consumption expenditures grew by 1.7 percent, gross private domestic investment grew by 3.0 percent,
government expenditure on goods and services decreased by -0.9 percent, imports grew by 2.9%, and exports grew by 6.0%. Given these data, it is most likely that A) GDP growth was positive in the 2nd quarter. B) GDP growth was negative in the 2nd quarter. C) the economy hit a business cycle peak. D) the economy hit a business cycle trough.
The local banking industry currently has a Herfindahl-Hirschman index (HHI) value of 1575 and two of the competing banks have considered merging. Because the merger would raise the HHI by 215 points, the Federal Trade Commission would likely
A) challenge the merger. B) not challenge the merger. C) allow the merger under the condition that HHI does not rise by more than 215 points as promised. D) allow the merger under the condition that the HHI remain at the premerger level of 1575.
On the long-run aggregate supply curve,
A) an increase in the price level increases the level of potential GDP. B) an increase in the price level has no effect on the aggregate quantity of GDP supplied. C) an increase in the price level reduces the aggregate quantity of GDP supplied. D) an increase in the price level increases the aggregate quantity of GDP supplied.
If the government is supplying a public good, the efficient quantity is where the:
A. total social benefit equals the cost. B. marginal social benefit is greater than the cost. C. marginal social benefit equals the cost. D. total social benefit outweighs the total cost.