Assume That Both the Demand Curve and the Supply Curve

question 58

Multiple Choice

Assume that both the demand curve and the supply curve for DVD players shift to the left but the supply curve shifts more than the demand curve.As a result

• A)both the equilibrium price and quantity of DVD players will decrease.
• B)the equilibrium price of DVD players will decrease; the equilibrium quantity may increase or decrease.
• C)the equilibrium price of DVD players may increase or decrease; the equilibrium quantity will increase.
• D)the equilibrium price of DVD players will increase; the equilibrium quantity will decrease.

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Definitions:

Minimizing Losses

A strategy focused on reducing the amount of money or resources wasted or not utilized efficiently.

Output

The total amount of goods and services produced by an economy or a firm in a specific period.

Natural Monopoly

A market condition where a single firm can supply a good or service to an entire market at a lower cost than two or more firms, often due to high fixed costs or unique resources.

Competitive Industries

Sectors of the economy characterized by a large number of firms competing fiercely with one another to sell similar products or services.