If price (P) and quantity (Q) are directly related, this means that:
A. a change in Q will alter P, but a change in P will not alter Q.
B. if P increases, Q will decrease.
C. if P increases, Q will also increase.
D. an increase in P will cause Q to change, but the direction in which Q changes cannot be
predicted.
Answer: C
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In a cartel,
a. all firms produce the same amount of output and earn the same profit b. all firms produce the same amount of output but earn different amounts of profit because their costs differ c. firms produce different amounts of output but earn the same profit d. firms with higher average cost produce more so that all firms earn the same profit e. firms with lower average cost often earn higher profits
In the basket of goods that is used to compute the consumer price index, the three largest categories of consumer spending are
a. housing, transportation, and recreation. b. housing, transportation, and food & beverages. c. housing, food & beverages, and education & communication. d. housing, medical care, and education & communication.