Assume That in Recent Years the Cost of Producing Microbrew

question 93

Multiple Choice

Assume that in recent years the cost of producing microbrew beer in the U.S.has decreased largely due to technological improvements.At the same time,more and more Americans prefer microbrew beer over wine.Which of the following best explains the effect of these events in the microbrew beer market?

• A)The supply curve has shifted to the right and the demand curve has shifted to the left.As a result there has been a decrease in the equilibrium quantity and an uncertain effect on the equilibrium price.
• B)Both the supply and demand curves have shifted to the right.As a result,there has been an increase in the equilibrium quantity and an uncertain effect on the equilibrium price.
• C)Both the supply and demand curves have shifted to the right.As a result,there has been an increase in both the equilibrium price and the equilibrium quantity.
• D)The supply curve has shifted to the left and the demand curve has shifted to the right.As a result,there has been an increase in the equilibrium price and an uncertain effect on the equilibrium quantity.

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Definitions:

Structural

Pertaining to the intrinsic, essential framework or construction of something, often used in contexts like structural reforms in economics or structural engineering.

Shipbuilder

A person or company that specializes in the construction of ships.

Specialized Skills

Specific expertise or abilities acquired through education or training, enhancing an individual's performance in a particular job.

Cyclical Unemployment

Employment that fluctuates with the business cycle, increasing during economic downturns and decreasing during periods of economic growth.