If a Perfectly Competitive Market Is in Equilibrium and Then

question 21

Multiple Choice

If a perfectly competitive market is in equilibrium and then market demand increases,which of the following would happen?

• A)producer surplus would definitely increase and consumer surplus may increase or decrease
• B)producer surplus would definitely decrease and consumer surplus may increase or decrease
• C)consumer surplus would definitely decrease and producer surplus may increase or decrease
• D)consumer surplus would definitely increase and producer surplus may increase or decrease
• E)producer and consumer surplus would remain unchanged

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Definitions:

Intervening Variable

An intervening variable is a hypothetical concept that explains the relationship between the independent (causal) and dependent (effect) variables in an experiment.

Political Affiliation

An individual's or group's association with a particular political party or ideology.

Political Orientation

Describes an individual's or group's predisposition towards certain political ideologies, parties, or policies.

Independent Variable

A variable in an experiment or model that is manipulated to observe its effect on a dependent variable, being the cause in a cause-and-effect relationship.