A Competitive Market Is in Equilibrium

question 125

Multiple Choice

A competitive market is in equilibrium. Then there is a decrease in demand and a decrease in supply. The equilibrium price ________, and the equilibrium quantity ________.

• A) rises; decreases
• B) perhaps changes but we can't say if it rises, falls or stays the same; decreases
• C) falls; increases
• D) rises; increases
• E) perhaps changes but we can't say if it rises, falls or stays the same; increases

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Definitions:

Service

A non-tangible offering that involves the provision of labor or expertise rather than a physical product.

Minimax Regret Strategy

Minimax Regret Strategy is a decision-making approach that aims to minimize the maximum possible regret from choosing an unfavorable option, considering the worst-case scenario.

Conservative Strategy

A risk management strategy that opts for investments or decisions that are expected to yield lower variability and risk.

Opportunity Loss Strategy

An approach in decision making that focuses on minimizing the potential loss for not choosing the best alternative.