Suppose That Demand for a Good Increases And, at the Same

question 54

Multiple Choice

Suppose that demand for a good increases and, at the same time, supply of the good decreases. What would happen in the market for the good?

• A)Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous.
• B)Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous.
• C)Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous.
• D)Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.

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Definitions:

Cost Savings

A reduction in expenses, achieving the same outcomes but at a lower cost.

Federal Trade Commission (FTC)

A federal agency established to prevent anticompetitive, deceptive, and unfair business practices through law enforcement, advocacy, and education.

Major Functions

The primary and most important activities performed by an organization, system, or process to achieve its goals.

Geographic Market

A specific area or region in which a company aims to sell its products or services, determined by geographical boundaries.