If Supply and Demand Intersect at a Price of $5

question 17

Multiple Choice

If supply and demand intersect at a price of $5.00, then a reduction in price from $6.00 to $5.00 will cause an increase in quantity:

• A) supplied, a decrease in quantity demanded, and the alleviation of a shortage.
• B) demanded, a decrease in quantity supplied, and the alleviation of a shortage.
• C) supplied, a decrease in quantity demanded, and the alleviation of a surplus.
• D) demanded, a decrease in quantity supplied, and the alleviation of a surplus.

---

Definitions:

Nash Equilibrium

A concept in game theory where no player can benefit by changing strategies if other players keep theirs unchanged.

Sequential Play

A feature of certain games in which players make moves one after the other, with each player aware of the preceding players' moves before making their own.

Utility Function

An economic model that ranks an individual's preferences for different combinations of various goods and services.

Edgeworth Box

A diagrammatic tool used in microeconomics to show various distributions of resources or outcomes between two agents in an economy.