Suppose That the Equilibrium Price and Quantity of New Houses

question 249

Multiple Choice

Suppose that the equilibrium price and quantity of new houses both increase.Which of the following could be a cause of this change?

• A) Both the supply and the demand for new houses increased, and the supply increased by more than the demand.
• B) The demand for new houses increased, and the supply did not change.
• C) Both the supply and demand for new houses decreased.
• D) The supply of new houses decreased, and the demand for new houses did not change.
• E) The supply of new houses increased, and the demand for new houses did not change.

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Definitions:

Marketing Efforts

Activities undertaken by a company to promote and sell its products or services.

Direct Forecast

A method where future values are estimated based on a direct analysis of past and present data, without involving intermediate steps.

Sensitivity Analysis

A method employed to ascertain the effects of varying levels of an independent variable on a specific dependent variable, given a certain set of presuppositions.

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in its price, indicating the sensitivity of demand to price changes.