Suppose a Market Were Currently at Equilibrium

question 73

Multiple Choice

Suppose a market were currently at equilibrium.A rightward shift of the supply curve would cause a(n)

• A) increase in price but a decrease in quantity.
• B) decrease in price but an increase in quantity.
• C) increase in both price and quantity.
• D) decrease in both price and quantity.

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Definitions:

Deadweight Losses

Losses in social welfare, usually measured in terms of lost revenue or surplus, resulting from inefficiencies in a market or the economy.

Taxes

Necessary financial levies or assorted kinds of dues imposed on an individual by a governmental structure to facilitate government finance and numerous public investments.

Deadweight Loss

A decrease in economic productivity that happens when a good or service does not reach or cannot reach its equilibrium state.

Tax

Mandatory charges imposed by governments on individuals or entities to fund public services and goods.