Use the Following to Answer Questions

question 27

Multiple Choice

Use the following to answer questions :
Figure 3-1
-Let P* and Q* represent market clearing price and quantity, respectively.Given the supply and demand curves drawn in Figure 3-1, the appearance of foreign suppliers willing to sell any quantity at a price slightly higher than equilibrium can be expected to cause:

• A)P* and Q* to climb.
• B)P* and Q* to fall.
• C)P* to climb while Q* falls.
• D)Q* to fall while P* holds steady.
• E)none of the above.

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