Suppose That the Incomes of Buyers in a Particular Market

question 45

Multiple Choice

Suppose that the incomes of buyers in a particular market for a normal good increase and there is also a reduction in input prices. What would we expect to occur in this 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) 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.