Suppose the Market for a Good Is Initially in Equilibrium

question 173

Multiple Choice

Suppose the market for a good is initially in equilibrium. For a given upward-sloping supply curve, all other things remaining unchanged, an increase in demand will typically _____

• A) increase the equilibrium price but the change the equilibrium quantity in either direction.
• B) increase the equilibrium quantity but change the equilibrium price in either direction.
• C) increase the equilibrium price but leave the equilibrium quantity unchanged.
• D) decrease both the equilibrium quantity and price.
• E) increase both the equilibrium quantity and price.

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Definitions:

Annual Output

The total production or output produced by a company or economy in a one-year period.

Trade

The exchange of goods and services between individuals or entities, often in return for money.

Beneficial

Resulting in a good outcome or advantage.

Government Intervene

Actions taken by a government to influence or directly manage an economy or specific markets, often aiming to correct market failures, redistribute resources, or stabilize the economy.