The Number of Firms Producing Computer Memory Chips Decreases

question 475

Multiple Choice

The number of firms producing computer memory chips decreases. As a result, the price of a memory chip ____________and the quantity of memory chips ___________.

• A) rises; decreases
• B) rises; increases
• C) falls; decreases
• D) falls; increases

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Definitions:

Equilibrium Price

The rate at which the amount of a good or service sought by consumers is equal to the amount available, achieving a state of market equilibrium.

Substitutes

Products or services that can replace or act as alternatives to another, affecting consumer choices and market dynamics.

Equilibrium Price

The price at which the quantity of goods supplied is equal to the quantity of goods demanded; also known as the market-clearing price.

Electric Autos

Vehicles powered by electric motors using energy typically stored in rechargeable batteries, offering an alternative to conventional internal combustion engine automobiles.