Exhibit 5-3 Use the Following Information About Demand and Supply

question 91

Multiple Choice

Exhibit 5-3 Use the following information about demand and supply schedules to answer the question.
Refer to Exhibit 5-3.Suppose that D₂ and S₁ are the prevailing demand and supply curves for a product.If the supply schedule changes from S₁ to S₂,then:

• A) equilibrium price decreases from $10 to $8.
• B) equilibrium quantity decreases from 15 to 12.
• C) equilibrium quantity increases from 10 to 12.
• D) equilibrium price increases from $10 to $12.

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Definitions:

Oligopolistic

Pertaining to a market structure characterized by a small number of firms dominating the market, leading to limited competition.

HHI

Herfindahl-Hirschman Index, a measure of market concentration to assess the level of competition among firms.

Herfindahl-Hirschman Index

An economic indicator used to evaluate the level of competition within an industry by measuring the concentration of market share held by the largest firms.

Proposed Merger

A plan or offer for two or more entities to combine their operations, resources, and managerial activities into a single unit.