Identify How the Described Changes Will Affect Equilibrium Price and Equilibrium

question 7

Multiple Choice

identify how the described changes will affect equilibrium price and equilibrium quantity
-There is an increase in the preference for a good that coincides with an increase in the wages for labor to produce the good.

• A)Increase in equilibrium price; increase in equilibrium quantity
• B)Decrease in equilibrium price; decrease in equilibrium quantity
• C)Equilibrium price is indeterminate; increase in equilibrium quantity
• D)Increase in equilibrium price; equilibrium quantity is indeterminate

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Definitions:

Equilibrium Market Output

The level of output where the quantity supplied equals the quantity demanded in the market, allowing no excess supply or demand.

Total Cost Function

A mathematical representation of the all-encompassing cost associated with production, including both fixed and variable costs, at various levels of output.

Economic Cost Function

A mathematical expression that describes the cost of producing a given quantity of output, incorporating all relevant costs.

Short-Run Supply Curve

A graphical representation showing the quantity of a good that producers are willing and able to supply at different prices in the short term, holding some factors constant.