What Would Be the Effect on the Equilibrium Price and Equilibrium

question 293

Multiple Choice

What would be the effect on the equilibrium price and equilibrium quantity of new housing if mortgage interest rates rise and the costs of building a house rise simultaneously?

• A) The equilibrium price will rise, and the equilibrium quantity will fall.
• B) The equilibrium price, and the equilibrium quantity will fall.
• C) The equilibrium price cannot be predicted, but the equilibrium quantity will fall.
• D) The equilibrium price will fall, but the equilibrium quantity cannot be predicted.