An increase in demand for a product and a reduction in the costs of production would:
a. increase the equilibrium quantity and increase the equilibrium price
b. increase the equilibrium quantity and decrease the equilibrium price.
c. increase the equilibrium quantity and cause an indeterminate change in the equilibrium price.
d. decrease the equilibrium quantity and cause an indeterminate change in the equilibrium price.
c
You might also like to view...
If the U.S. were to revert to a gold standard, trade deficits would:
A. result in gold reserves in the U.S. decreasing. B. result in high inflation. C. quickly disappear. D. result in lower domestic interest rates.
In which type of trade agreement does the WTO allow exclusions to the most favored nation principle?
a. multilateral trade agreements b. free-trade areas c. customs unions d. free-trade areas and customs unions
Monetarists think that the Fed should use ________ as a target when conducting monetary policy
A) the inflation rate B) the Treasury bill rate C) the money supply D) the federal funds rate E) the unemployment rate
Why don't some firms in monopolistic competition earn losses in the long run?
A) The firms have enough monopoly power to ensure they always earn profits. B) Free entry allows enough firms to remain in the market and maintain the critical mass of firms required to attract customers. C) Free exit implies that any unprofitable firms leave the market in the long run. D) In the long run, firms will build enough brand loyalty among customers to ensure a profitable level of sales.