Let D = Demand, S = Supply, P = Equilibrium

question 31

Multiple Choice

Let D = demand, S = supply, P = equilibrium price, and Q = equilibrium quantity.What happens in the market for electric vehicles if the government offers incentives to manufacturers to produce more electric vehicles?

• A)D increases, S no change, P and Q increase
• B)S increases, D no change, P decreases, Q increases
• C)D and S increase, P and Q decrease
• D)D no change, S increases, P decreases, Q decreases

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Definitions:

Marginal Utility

The additional satisfaction or benefit (utility) a consumer receives from consuming one additional unit of a good or service.

Price of Diamonds

The cost at which diamonds are sold or bought, influenced by several factors including quality, supply, and demand.

Price of Water

The cost assigned to water consumption, varying based on location, availability, and delivery methods.

Marginal Utility

The additional benefit or utility gained from consuming an extra unit of a good or service.