The Price of Oranges Rises

question 96

Multiple Choice

The price of oranges rises.What happens in the market for apples, which are a substitute for oranges?

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

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Definitions:

Offer

A proposal presented by one party to another with the intention to create a legally binding agreement upon acceptance.

Escrow Account

An escrow account is a financial arrangement where a third party holds and regulates payment of the funds required for two parties involved in a given transaction, ensuring fair and secure dealings.

Objective Theory

A legal principle stating that the terms of a contract are interpreted based on external expressions (actions, words) rather than internal intentions.

Offeror's Words

The specific language or phrasing used by the person making an offer in a contract scenario, which can impact the terms and acceptance of the contract.