What Will Happen If Both the Demand for and Supply

question 60

Multiple Choice

What will happen if both the demand for and supply of a product increase simultaneously?

• A)The effect on the quantity traded is indeterminate.
• B)The quantity traded will increase.
• C)The quantity traded will decrease.
• D)The price will rise.

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Definitions:

Monopolistically Competitive

A market configuration where numerous companies offer goods that are alike but not the same, granting them a measure of control over the market.

Demand Schedule

A table that lists the quantity of a good that consumers are willing and able to purchase at various prices over a specific period.

Cost Schedules

A representation or table that outlines the costs associated with production at different levels of output.

Economic Profits

Economic profits are the financial gains made by a firm or individual after accounting for both explicit and implicit costs, distinguishing from accounting profits by considering opportunity costs.