An Increase in the Equilibrium Price and a Decrease in the Equilibrium

question 329

Multiple Choice

An increase in the equilibrium price and a decrease in the equilibrium quantity can be the result of

• A) a decrease in demand.
• B) an increase in supply.
• C) a decrease in supply.
• D) an increase in demand.
• E) None of the above.

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Definitions:

Inventory

The sum of all goods and materials held by a company in stock, including raw materials, work-in-progress, and finished goods.

Investment Expenditures

Spending on capital goods by firms and households which will be used for future production of goods and services.

GDP Accounting

A method used to calculate the gross domestic product of a country, summing up the total value of all goods and services produced over a specific time period.

Tangible Goods

Tangible goods are physical items that can be touched and seen, distinguished from services or digital products.