Assuming That the Demand for Cars Is Constant, an Increase

question 33

Multiple Choice

Assuming that the demand for cars is constant, an increase in the cost of labour used in producing cars will lead to:

• A) an increase in the equilibrium price but a decrease in the equilibrium quantity.
• B) a decrease in the equilibrium price but an increase in the equilibrium quantity.
• C) a decrease in both the equilibrium price and quantity.
• D) an increase in both the equilibrium price and quantity.

---

Definitions:

ROI Calculations

The process of determining the return on investment by dividing the net profit by the initial cost of the investment.

Margin

The difference between the selling price of a good or service and the cost of producing it, often expressed as a percentage of the selling price.

Return on Investment

A measure of the profitability of an investment, calculated as a percentage of the return relative to the investment's cost.

Investment Opportunity

A potential financial venture or asset purchase that could yield returns in the future.