Suppose We Observe That Both the Equilibrium Price of Digital

question 57

Multiple Choice

Suppose we observe that both the equilibrium price of digital cameras and the equilibrium quantity of digital cameras have increased. Which of the following events could be responsible for this?

• A)Consumers' preferences changed in favour of digital cameras.
• B)Technological advances in digital camera production.
• C)The price of film cameras fell.
• D)Workers who make digital cameras received a pay raise.

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Definitions:

Market Wage Rate

The prevailing rate of pay for a specific job in a given labor market.

Factor Demand Curve

Graphical representation showing the quantity of a factor of production demanded at different prices for that factor.

Good Produces

The output or products manufactured or produced by a business, industry, or economy.

VMPL

The Value of Marginal Product of Labor, which represents the additional value created by employing one more unit of labor, assuming other factors remain constant.