Use the Following to Answer Questions

question 39

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, an increase in the price of an input employed in the production of Q can be expected to cause:

• A)P* and Q* to climb.
• B)P* to climb while Q* falls.
• C)P* to climb while Q* holds steady.
• D)P* to fall while Q* climbs.
• E)P* and Q* to fall.

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Definitions:

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