Refer to the Information Provided in Figure 34

question 6

Multiple Choice

Refer to the information provided in Figure 34.4 below to answer the question(s) that follow. Figure 34.4
-Refer to Figure 34.4. The demand and supply of pounds are D₁ and S₁. If the demand shifts to D₂ and supply remains unchanged at S₁

• A) the dollar depreciates and the equilibrium quantity of pounds increases.
• B) the dollar depreciates and the equilibrium quantity of pounds decreases.
• C) the dollar appreciates and the equilibrium quantity of pounds decreases.
• D) the dollar appreciates and the equilibrium quantity of pounds increases.

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Definitions:

Market Structure

The organization and characteristics of a market, including the number and size of firms, product differentiation, and entry and exit barriers.

Homogeneous Products

Goods that are seen as identical by consumers, making them perfect substitutes for one another.

Perfectly Competitive

A market structure characterized by a large number of small firms, homogeneous products, and free entry and exit.

Monopolistically Competitive

Describes a market structure where many companies sell products that are similar but not identical, allowing for firms to have some market power.