After a hurricane in Florida knocked out the regional water supply for several days, the demand for bottled water increased sharply. In a market economy, how will this increase in demand affect the equilibrium price and quantity of bottled water?
A. Price will increase, and quantity will decrease.
B. Price will decrease, and quantity will decrease.
C. Price will decrease, and quantity will increase.
D. Price will increase, and quantity will increase.
Answer: D
You might also like to view...
Ed's Electronic Devices has an asset beta of 1.2. The market rate of return is 12% and the risk-free rate of return is 2%. Ed is considering updating his production technology
If he does so, he expects the cash streams indicated in the table below. Given this information, should Ed update his production technology? Year Cashflow Present Value 0 -$100,000 1 $25,000 2 $25,000 3 $25,000 4 $25,000 5 $25,000 6 $25,000 Total
If the supply curve for orange juice is estimated to be Q = 40 + 2p, then
A) supply is price elastic at all prices. B) supply is price inelastic at all prices. C) supply is elastic only at prices below 20. D) No general statements about price elasticity of supply can be made.