Suppose That the Incomes of Buyers in a Particular Market

question 18

Multiple Choice

Suppose that the incomes of buyers in a particular market for a normal good decline and there is also a reduction 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)both equilibrium price and equilibrium quantity would increase
• D)equilibrium quantity would increase but the impact on equilibrium price would be ambiguous

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Definitions:

Domestic Corporation

A corporation that is registered, operates, and is taxed in its home country, adhering to the legal and regulatory standards of that country.

Fiscal Year-End

The completion of a one-year, or twelve-month, accounting period, after which financial statements are produced.

Income Tax Return

The document filed with a tax authority reporting income, expenses, and other tax-related information to determine tax liability or refund eligibility.

Corporation

A corporation is a legal entity that is separate and distinct from its owners, which can enter into contracts, own assets, and is subject to taxation.