Other Things Being Equal, a Higher Price Induces

question 175

Multiple Choice

Other things being equal, a higher price induces

• A) buyers to reduce the amount they want to buy and sellers to increase the amount they are willing to sell.
• B) buyers to increase the amount they want to buy and sellers to reduce the amount they are willing to sell.
• C) buyers to reduce the amount they want to buy and sellers to reduce the amount they are willing to sell.
• D) buyers to increase the amount they want to buy and sellers to increase the amount they are willing to sell.

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Definitions:

Industrial Regulation

Involves government rules and policies aimed at controlling the practices, standards, and market entry of firms in specific industries to prevent unfair practices and promote competition.

X-Inefficiency

An economic concept that captures inefficiencies in a firm's operations due to factors such as a lack of competitive pressure.

Principal-Agent Problems

Issues that arise when a principal hires an agent to perform tasks, and the agent's self-interest does not align with the principal's, leading to potential conflicts.

Social Regulation

Government-imposed rules and regulations designed to protect public health, safety, and well-being, affecting how businesses can operate.