Suppose in the Market for IPhones, the Following Two Changes

question 221

Multiple Choice

Suppose in the market for iPhones, the following two changes take place: (1) the cost of making iPhones rises, and (2) customers begin to prefer Android-platform smartphones over iPhones. What happens to equilibrium price and equilibrium quantity?

• A) The equilibrium price and the equilibrium quantity fall.
• B) The equilibrium price falls, but the equilibrium quantity is indeterminate.
• C) The equilibrium price is indeterminate, but the equilibrium quantity falls.
• D) The equilibrium price rises, but the equilibrium quantity is indeterminate.

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Definitions:

Indicator Species

Species that serve as a measure of the environmental conditions of a habitat or ecosystem, often used to assess changes in environmental health.

Grasses

Members of the Poaceae family, a large and nearly ubiquitous family of monocotyledonous flowering plants.

Competitive Interaction

The interaction between organisms or species, in which the fitness of one is lowered by the presence of another.