Following Adjustments to a New Equilibrium in a Market, the Equilibrium

question 50

Multiple Choice

Following adjustments to a new equilibrium in a market, the equilibrium quantity remains unchanged, but the market clearing price is now lower. Which of the following could definitely have caused this outcome?

• A) Demand and supply both increased.
• B) Demand and supply both decreased.
• C) Demand increased, and supply decreased.
• D) Demand decreased, and supply increased.

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Definitions:

Urban Areas

Regions characterized by high population density and vast human features in comparison to areas surrounding them.

World War II

A global conflict that lasted from 1939 to 1945, involving most of the world's nations, including all of the great powers, organized into two opposing military alliances.

Urban Sprawl

The uncontrolled expansion of urban areas into the surrounding countryside, often characterized by low-density housing and increased reliance on automobiles.

Scarce Resource

A limited or insufficient supply of something valuable, necessitating careful management and allocation.