If Demand Increases and Supply Decreases, Then Equilibrium Price Must

question 32

True/False

If demand increases and supply decreases, then equilibrium price must decrease, but equilibrium quantity is indeterminate.

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Definitions:

Consumer Product Safety Act

A federal law that aims to protect consumers from products that pose fire, chemical, mechanical, or electrical hazards, promoting the safety of consumer products.

Product Liability

The legal responsibility of manufacturers and sellers to ensure that their products are safe and free from defects, and to compensate for any damages caused by their products.

Contaminated Products

Items that have been tainted with substances that are harmful or undesired, affecting the product's safety and quality.

Quality Loss Function

A mathematical formula developed by Genichi Taguchi to measure the cost of deviating from target values, emphasizing minimizing variability and losses associated with poor quality.