Which of the following statements is CORRECT?
A) When demand increases, both the price and the quantity increase.
B) When demand decreases, the price rises and the quantity decreases.
C) When supply increases, the quantity decreases and the price rises.
D) When supply decreases, both the price and the quantity decrease.
A
You might also like to view...
If there are only two goods and these are consumed in fixed proportions, the price elasticities of demand for these two goods will sum to:
a. 0.0. b. -0.5. c. -1.0. d. a number between 0 and -1.
If a monopolistically competitive firm is suffering losses in the short run:
A. the exit of competing firms will cause price to drop, but not affect the firm's demand curve. B. the exit of competing firms will shift the firm's demand to the right. C. the exit of competing firms will shift the firm's demand to the left. D. the exit of competing firms will cause price to rise, but not affect the firm's demand curve.