Which of the Following Market Outcomes Can Be Explained by the Supply-Demand

question 77

Multiple Choice

Which of the following market outcomes can be explained by the supply-demand model?

• A)An increase in the demand for cigarettes after an increase in its price
• B)A decrease in household consumption following an increase in average monthly income
• C)An increase in supply in spite of a decline in input prices
• D)An increase in the per capita consumption of medical care in a country due to an epidemic

---

Definitions:

Manufacturing Plants

Facilities where raw materials are transformed into finished goods through various processes and machinery.

Duty-Free

A retail environment where goods are sold to international travelers without the inclusion of certain local or national taxes and duties.

Central-Planning Economy

An economic system where the government or central authority makes all decisions regarding the production and distribution of goods and services.

Product Output Quotas

Predetermined targets for the quantity of products that must be produced within a specific timeframe.