Suppose That the Incomes of Buyers in a Particular Market

question 64

Multiple Choice

Suppose that the incomes of buyers in a particular market for a normal good increase and there is also an increase in input prices. What would we expect to occur in this 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 price would increase, but the impact on equilibrium quantity would be ambiguous.

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Definitions:

Environmental Uncertainty

Refers to unpredictable changes and complexities in an organization's external environment that can affect its operations and decision-making processes.

External Environment

All external factors and forces that can affect an organization's performance, including economic, social, political, and technological aspects.

Competitive Advantage

The attributes or conditions that allow an organization to outperform its competitors.

Cost Efficiency

The effectiveness of an organization's ability to produce output at the lowest possible cost while maintaining quality.