A Decrease in Demand and a Decrease in Supply Will

question 212

Multiple Choice

A decrease in demand and a decrease in supply will lead to

• A) unambiguous increases in both price and quantity.
• B) unambiguous decreases in both price quantity.
• C) an unambiguous decrease in price, but the effect on quantity is indeterminate.
• D) an unambiguous decrease in quantity, but the effect on price is indeterminate.

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Definitions:

Expected Return

The anticipated profit or loss from an investment, considering both the probability and the impact of all possible outcomes.

Cost of Funds

The interest rate that financial institutions and other lenders charge each other for the use of money, as in loans or deposits.

Income

The financial gain received by an individual or entity, typically measured on a per year basis, from work, investments, or other sources.

Average Total Cost Curve

A graphical representation that shows the average cost of production per unit at different levels of output.