Assume the Demand for Graphics Cards Decreases,while the Supply Increases

question 122

Multiple Choice

Assume the demand for graphics cards decreases,while the supply increases.Which of the following outcomes is certain to occur?

• A) The equilibrium price of graphics cards will rise.
• B) The equilibrium quantity of graphics cards will rise.
• C) The equilibrium price of graphics cards will fall.
• D) The equilibrium quantity of graphics cards will fall.
• E) Neither the equilibrium price nor the equilibrium quantity of graphics cards can be predicted.

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Definitions:

Economies of Scale

Cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale.

Marginal Cost

The expenditure required to produce an additional unit of a product.

Short-run Cost Function

An economic formula that describes how production costs change in the short term with varying levels of output, assuming some inputs are fixed.

Average Cost

The cost per unit of output, calculated by dividing total costs by the total quantity of output produced.