Exhibit 4-3 Supply and demand curves
The market shown in Exhibit 4-3 is initially in equilibrium at E4. Changes in market conditions result in a new equilibrium at E3. This change is stated as a(n):
A. increase in supply and an increase in quantity demanded.
B. increase in supply and a decrease in demand.
C. decrease in supply and a decrease in quantity demanded.
D. increase in demand an increase in supply.
Answer: C
Economics
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Total producer surplus in a market is measured as the
A) area bounded above the market clearing price and beneath the market demand curve. B) area bounded below the market clearing price and above the market supply curve. C) vertical distance from the horizontal (quantity) axis to the market clearing price. D) horizontal distance from the vertical (price) axis to the equilibrium quantity.
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