Suppose There Is an Increase in Both the Supply and Demand

question 43

Multiple Choice

Suppose there is an increase in both the supply and demand for laptops. Further, suppose the supply of laptops increases more than demand for laptops. In the market for laptops, we would expect

• A) the change in the equilibrium quantity to be ambiguous and the equilibrium price to fall.
• B) the equilibrium quantity to rise and the equilibrium price to rise.
• C) the equilibrium quantity to rise and the change in the equilibrium price to be ambiguous.
• D) the equilibrium quantity to rise and the equilibrium price to fall.
• E) the equilibrium quantity to rise and the equilibrium price to remain constant.

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Definitions:

Normally Distributed

The distribution is noted for its symmetry about the mean, with a higher concentration of data points near the mean and fewer occurrences as the distance from the mean increases.

Explanatory Variables

Variables in a statistical model that are used to explain variation in the response variable; also known as independent variables.

Response Variable

The variable in a study that responds or is presumed to change due to the influence of another variable.

Weakest Correlation

The situation where two variables have the smallest degree of linear relationship between them, often near zero.