An Increase in Which of the Following Would Lead to Decrease

question 19

Multiple Choice

An increase in which of the following would lead to decrease in equilibrium output and an increase in equilibrium prices?

• A) positive demand shock
• B) negative demand shock
• C) positive supply shock
• D) negative supply shock

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Definitions:

Long Run

Refers to a period in which all factors of production and costs are variable, allowing firms to adjust all inputs.

Own Price Elasticity

An index that illustrates the reaction of demand for a good to the adjustment in its price.

Price Elasticity of Supply

Price Elasticity of Supply measures how the quantity of a good supplied changes in response to a change in price, indicating how sensitive the supply of the good is to price changes.

Fiberglass Truck Hoods

Truck hoods made from fiberglass, a lightweight and durable material, used to cover the engine area.