Suppose That the Number of Buyers in a Market Increases

question 231

Multiple Choice

Suppose that the number of buyers in a market increases and a technological advancement occurs. What would we expect to happen in the market?

• A) The equilibrium price would increase, but the impact on the amount sold in the market would be ambiguous.
• B) The equilibrium price would decrease, but the impact on the amount sold in the market would be ambiguous.
• C) Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.
• D) Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous.

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Definitions:

Stockholders

Individuals or entities that own shares of stock in a corporation, giving them partial ownership of the company.

Acquiring Firms

Companies involved in the process of buying or merging with other companies to increase their size and capabilities.

Acquisition

The process by which one company takes over the control or ownership of another company, either through direct purchase, merger, or exchange of shares.

Target Firm

A company that is the object of a takeover attempt, whether friendly or hostile, by another company or corporate entity.