Figure 3-8

question 7

Multiple Choice

Figure 3-8
-Refer to Figure 3-8. The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D₁ and S₁ (point A) . If the price of motorcycle engines increases, and the wages of motorcycle workers increase, how will the equilibrium point change?

• A) The equilibrium point will move from A to E.
• B) The equilibrium point will move from A to B.
• C) The equilibrium point will move from A to C.
• D) The equilibrium will first move from A to B, then return to A.

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Definitions:

Sealed Bid

A method of auction where all bids are submitted confidentially, with the highest bidder winning.

Bid-Rigging Cartel

A secretive agreement between competitors to fix bidding processes to ensure a predetermined outcome.

Winning Bid

The highest offer made in an auction that wins the item or contract being auctioned.

Bidders Values

The individual valuation that bidders assign to the item or items being auctioned, which influences their bidding strategy.