-Using the Above Figure, Suppose There Is a Decrease in the Number

question 407

Multiple Choice

-Using the above figure, suppose there is a decrease in the number of suppliers. Then

• A) the equilibrium price will decrease below $25 per dozen roses.
• B) we cannot predict what will happen to equilibrium quantity.
• C) the equilibrium quantity will decrease below 10 dozen roses.
• D) both the equilibrium price and quantity will increase.

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Definitions:

Comparative Advantage

The ability of an entity to produce goods or services at a lower opportunity cost than others, leading to more efficient trade possibilities.

Opportunity Costs

Opportunity costs represent the benefits an individual, investor, or business misses out on when choosing one alternative over another.

Mutually Beneficial Trade

A trade agreement between parties that provides gains or advantages to all involved parties.

Tariff

a tax imposed on imported goods and services, intended to make foreign commodities less price-competitive than domestic goods.