Suppose in the Market for IPhones, the Following Two Changes

question 220

Multiple Choice

Suppose in the market for iPhones, the following two changes take place: (1) the cost of making iPhones falls, and (2) the price of smartphone data plans falls. What happens to the equilibrium price and the equilibrium quantity?

• A) The equilibrium price and the equilibrium quantity rise.
• B) The equilibrium price falls, but the equilibrium quantity is indeterminate.
• C) The equilibrium price is indeterminate, but the equilibrium quantity rises.
• D) The equilibrium price rises, but the equilibrium quantity is indeterminate.

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Definitions:

Liability

A financial obligation or debt that a company owes, which will need to be paid to creditors, suppliers, or other parties.

Consolidated Balance Sheet

A financial statement that presents the assets, liabilities, and shareholders' equity of a parent company and its subsidiaries as one entity.

Net Assets

The total assets of a company or organization minus its total liabilities, reflecting the entity's own equity value.