Suppose That the Number of Buyers in a Market Increases

question 150

Multiple Choice

Suppose that the number of buyers in a market increases and expectations of the price of the good indicate that its price will rise in the future.What would we expect to happen in the market?

• A)the equilibrium price would increase but the impact on the amount sold in the market would be ambiguous
• B)the equilibrium price would decrease but the impact on the amount sold in the market would be ambiguous
• C)both equilibrium price and equilibrium quantity would increase
• D)equilibrium quantity would increase but the impact on equilibrium price would be ambiguous

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Definitions:

Fixed Manufacturing Overhead

Regular, unchanged costs incurred during the manufacturing process, regardless of the level of output.

Variable Costing

A costing method that only includes variable production costs in product costs, excluding fixed manufacturing overhead.

Net Operating Income

The profit generated from a company's day-to-day operations, excluding investment and financing transactions.

Operations

Refers to the day-to-day activities necessary for a business to function, including production, inventory management, and logistics.