Suppose That the Number of Buyers in a Market Decreases

question 216

Multiple Choice

Suppose that the number of buyers in a market decreases and a technological advancement occurs. What would we expect to happen in the 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 increase, but the impact on equilibrium price would be ambiguous.
• D) Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous.

Analyze the effects of various transactions on the accounting equation.

Identify the role of owner's withdrawals and their impact on owner's equity.

Recognize how revenue is earned and reported in financial statements.

Distinguish between different types of transactions, including those that are not considered business transactions.

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Definitions:

Original Price

The initial price of a product or service before any discounts, markdowns, or promotions.

Percentage Changes

A mathematical calculation that indicates how much a quantity has increased or decreased in percentage terms compared to a previous period.

Midpoint Formula

A method used in economics to calculate the elasticity of demand or supply by averaging the initial and final quantities and prices to estimate the percentage change.

Price Elasticity

measures how much the quantity demanded of a good changes in response to a change in the price of that good.