Which of the Following Statements Is Correct

question 85

Multiple Choice

Which of the following statements is correct?

• A) When both demand and supply decrease, the quantity decreases and the price might rise, fall, or remain the same.
• B) When both demand and supply decrease, the quantity increases and the price might rise, fall, or remain the same.
• C) When both demand and supply increase, the quantity decreases and the price might rise, fall, or remain the same.
• D) When both demand and supply increase, the price rises and the quantity might increase, decrease, or remain the same.

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Definitions:

Rental Rate

The price paid for the temporary use of a good, service, or property expressed typically as a daily, monthly, or yearly rate.

Minimum Cost

The lowest possible expense incurred in the production of a good or the provision of a service.

Output Levels

The quantity of goods or services produced by a firm, industry, or economy in a given period.

Competitive Market

An economic system where multiple firms sell similar products or services, encouraging fairness and efficiency, driven by supply and demand mechanisms.