The Number of Firms Producing Computer Memory Chips Decreases

question 273

Multiple Choice

The number of firms producing computer memory chips decreases. As a result, the price of a memory chip ________ and the quantity of memory chips ________.

• A) rises; increases
• B) rises; decreases
• C) falls; increases
• D) falls; decreases

---

Definitions:

Perfectly Inelastic

A situation in demand where the quantity demanded does not change in response to a change in price.

Insulin

A hormone produced by the pancreas that regulates blood glucose levels by facilitating the uptake of glucose into tissues, used medically to treat diabetes.

Quantity Demanded

The total amount of a good or service that consumers are willing to buy at a given price level in a given period.

Perfectly Inelastic

Describing a situation where the quantity demanded or supplied of a good does not change in response to a price change.