Which of the following statements is true?
A) If both demand and supply increase there must be an increase in equilibrium price; equilibrium quantity may either increase or decrease.
B) An increase in supply causes a change in equilibrium price; the change in price does not cause a further change in demand or supply.
C) If demand decreases and supply increases one cannot determine if equilibrium price will increase or decrease without knowing which change is greater.
D) A decrease in supply causes equilibrium price to rise; the increase in price then results in a decrease in demand.
B
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Assume that you pay $10,000 of tax on a taxable income of $50,000. If your taxable income were $150,000, your tax payment would be $25,000. This tax structure is:
A. proportional. B. regressive. C. progressive. D. discriminatory.
If the Fed raises the interest rate, this will ______ inflation and ______ real GDP in the short run.
a. reduce; raise b. increase; lower c. increase; raise d. reduce; lower