If We Observe a Decrease in the Equilibrium Quantity of Good

question 53

Multiple Choice

If we observe a decrease in the equilibrium quantity of good A,we know that

• A)either the demand for A has increased or the supply of A has decreased or both.
• B)either the demand for A has increased or the supply of A has increased or both.
• C)either the demand for A has decreased or the supply of A has increased or both.
• D)either the demand for A has decreased or the supply of A has decreased or both.
• E)the price of A has fallen.

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Definitions:

Productive Efficiency

A situation in which an economy or entity is operating in such a way that it cannot produce more of one good without producing less of another.

Creative Destruction

The process by which new innovations cause older technologies, companies, or products to become obsolete, driving economic growth through continuous renewal.

Dominant Firms

Companies that have a major portion of market share and can significantly influence market conditions and prices.

New Products

Items or services that have recently been introduced to the market and offer new features, functionalities, or benefits to consumers.