Assume the demand for sugar decreases and the supply of sugar increases. Which of the following outcomes is certain to occur?
A. The equilibrium price of sugar will rise.
B. The equilibrium quantity of sugar will rise.
C. The equilibrium quantity of sugar will fall.
D. The equilibrium price of sugar will fall.
Answer: D
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Sue consumes only sandwiches and soda and is at her best affordable point. The price of a sandwich falls. The substitution effect is that Sue substitutes ________ for ________. The income effect is that Sue ________
A) sandwiches; soda; buys less of both goods B) soda; sandwiches; buys more soda and fewer sandwiches C) sandwiches; soda; buys more of both goods D) soda; sandwiches; buys less soda and more sandwiches
For a monopsonistic hirer of labor, the gap between labor's marginal revenue product and its wage rate will be greater:
a. the more elastic the supply curve for labor. b. the more inelastic the supply curve for labor. c. the more elastic the firm's demand for labor. d. the more inelastic the firm's demand for labor.