Assume That the Demand Curve for MP3 Players Shifts to the Right

question 69

Multiple Choice

Assume that the demand curve for MP3 players shifts to the right and the supply curve for MP3 players shifts to the left,but the supply curve shifts less than the demand curve.As a result,

• A) both the equilibrium price and quantity of MP3 players will decrease.
• B) both the equilibrium price and quantity of MP3 players will increase.
• C) the equilibrium price of MP3 players may increase or decrease; the equilibrium quantity will decrease.
• D) the equilibrium price of MP3 players will increase; the equilibrium quantity will decrease.

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Definitions:

Private Sector

Part of the economy that is run by individuals and companies for profit and is not under direct state control.

Entrepreneurs

Individuals who initiate, manage, and assume the risks of starting and operating a business with the aim of making a profit.

Third Party

An entity involved in a transaction besides the two main parties; in insurance, the person other than the policyholder and the insurer who may be affected by or have a claim against the policy.

Costs

The amount that must be paid or spent to buy or obtain something.