What Would Happen in the Market for SUVs If the Government

question 112

Multiple Choice

What would happen in the market for SUVs if the government started to subsidize the production of SUVs that get very few miles per gallon and the price of gasoline went up?

• A) The equilibrium price will go up and equilibrium quantity will go up.
• B) The equilibrium price will go down and equilibrium quantity will be indeterminate.
• C) The equilibrium price will be indeterminate and equilibrium quantity will go up.
• D) The equilibrium price will go up and equilibrium quantity will be indeterminate.
• E) The equilibrium price will be indeterminate and equilibrium quantity will go down.

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Definitions:

Magazine Advertising

A marketing strategy involving the placement of advertisements in print or digital magazines to reach target audiences.

Uncertainty

The state of having limited knowledge where it is impossible to exactly describe the existing state, a future outcome, or more than one possible outcome.

Personal Selling

A direct marketing approach where salespeople personally communicate with potential buyers to promote and sell products or services.

Salesperson

An individual who sells goods and services to other entities, usually in exchange for money.