Consider a Market That Is in Equilibrium

question 145

Multiple Choice

Consider a market that is in equilibrium. If the market experiences an increase in demand:

• A) the equilibrium price and quantity will rise.
• B) the equilibrium price will rise and the equilibrium quantity will fall.
• C) the equilibrium price and quantity will fall.
• D) the equilibrium price will fall and the equilibrium quantity will rise.

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Definitions:

Diminishing Marginal Product

The decrease in the additional output gained from using an extra unit of a production input, holding all other inputs constant, beyond a certain point.

Marginal Product

The supplementary yield that comes from the utilization of an extra unit of a given input, with all other inputs remaining fixed.

Number of Workers

The total count of individuals currently employed or available for employment in a specific labor market.

Daily Output

The total quantity of goods or services produced by a firm or an economy in a single day.