What Will Happen to the Equilibrium Price and Quantity of New

question 249

Multiple Choice

What will happen to the equilibrium price and quantity of new cars if the price of gasoline rises, the price of steel rises, public transportation becomes cheaper and more comfortable, and auto-workers negotiate higher wages?

• A)Price will fall, and the effect on quantity is ambiguous.
• B)Price will rise, and the effect on quantity is ambiguous.
• C)Quantity will fall, and the effect on price is ambiguous.
• D)Quantity will rise, and the effect on price is ambiguous.

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Definitions:

Indeterminate

A state in which something cannot be exactly established, known, or decided.

Positive

A descriptor indicating an increase, growth, or beneficial effect in a particular context.

Constant

A value or parameter in mathematics and science that remains unchanged throughout a given discussion, analysis, or calculation.

Negative

In finance and economics, refers to a condition or a situation where the figures or the outcomes are less than zero, indicating a loss or decrease.