A decrease in demand and an increase in supply will lead to
A) an unambiguous decrease in quantity, but the effect on price is indeterminate.
B) an unambiguous decrease in price, but the effect on quantity is indeterminate.
C) unambiguous decreases in both price and quantity.
D) unambiguous increases in both price and quantity.
Ans: B) an unambiguous decrease in price, but the effect on quantity is indeterminate.
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An effective price ceiling occurs when
A) the government sets a maximum price for a good above the equilibrium price. B) the government sets a minimum price for a good above the equilibrium price. C) the government sets a minimum price for a good below the equilibrium price. D) the government sets a maximum price for a good below the equilibrium price.
There are many different models of oligopoly because:
A. firms do not maximize profits in oligopolistic competition. B. beliefs are not incorporated in oligopolistic competition and oligopoly is the most complicated type of market structure. C. beliefs are not incorporated in oligopolistic competition. D. oligopoly is the most complicated type of market structure.