The Market for Chewing Gum Is Competitive with a Current

question 223

Multiple Choice

The market for chewing gum is competitive with a current price of 50 cents per pack and quantity of 100, 000 packs.Which of the following events would lead to a new equilibrium price of 40 cents and quantity of 80, 000 packs?

• A)an increase in the price of other kinds of candy
• B)an increase in the price of the ingredients used to make chewing gum
• C)a decrease in the number of young people in the population
• D)an agreement by workers in the chewing gum industry to work for lower wages
• E)an improvement in chewing gum production technology

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Definitions:

Sample Information

Data or facts obtained from a subset of a larger population, used for the purpose of statistical analysis or estimation of parameters of the entire population.

Expected Monetary Value

A statistical technique used in decision-making to calculate the average outcome when the future includes scenarios that may or may not happen.

Expected Payoff

Expected Payoff is a term often used in economics and finance to describe the average outcome of a set of uncertain events, considering each possible outcome and its probability.

Perfect Information

A situation in which all participants have access to all the information needed to make an informed decision.