A Decrease in Supply of X Increases the Equilibrium Price

question 301

True/False

A decrease in supply of X increases the equilibrium price of X, which reduces the demand for X and
automatically returns the price of X to its initial level.

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Definitions:

Overgeneralizing

A mental bias characterized by making extensive, general assumptions from one occurrence or bit of data.

Dichotomous Thinking

A cognitive distortion involving seeing things in black and white, or all-or-nothing terms, lacking shades of gray.

Overgeneralization

A cognitive distortion where a person draws broad, generalized conclusions from a single or few incidents, often leading to negative thinking and outcomes.

REBT

Rational Emotive Behavior Therapy, a form of psychotherapy that focuses on identifying and changing irrational beliefs that cause emotional distress.