In the Automobile Industry, Workers Have Just Negotiated a New

question 74

Multiple Choice

In the automobile industry, workers have just negotiated a new contract giving workers a large raise. There has also been an increase in the number of licensed drivers who are in the market for a new car. In the market for new automobiles, the effects that these changes will have on the equilibrium price and quantity are

• A) price will increase, and quantity will decrease.
• B) price will increase, and the effect on quantity is indeterminate.
• C) price will decrease, and quantity will increase.
• D) price will decrease, and the effect on quantity is indeterminate.

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Definitions:

Quasi-contractual

A legal concept where a court enforces a contract-like obligation on a party to prevent unjust enrichment, even though no actual contract exists.

Contractual Obligation

A duty or commitment that is legally binding under a contract, requiring parties to fulfill agreed terms.

Unaddressed Envelope

An envelope lacking a specific destination address, often used for general mail distribution or marketing purposes.

Promissory Estoppel

A legal principle that prevents a party from withdrawing a promise made to a second party if the latter has reasonably relied on that promise to their detriment.