A Decrease in the Demand for Bananas with No Concurrent

question 33

Multiple Choice

A decrease in the demand for bananas with no concurrent change in the supply of bananas will result in a ________ equilibrium price and a(n) ________ equilibrium quantity.

• A)higher; lower
• B)lower; lower
• C)higher; unchanged
• D)higher; higher

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Definitions:

Oligopoly Model

A market structure characterized by a few firms dominating the market, leading to strategic interactions in pricing and production.

Cournot

Refers to a model of duopoly competition in which companies choose quantity to produce independently, influencing the market price.

Nash Equilibrium

An idea in game theory where a player cannot benefit by changing their own strategy alone, assuming the strategies of other players are constant.

Marginal Cost

The increase in cost that arises from producing one additional unit of a good or service.